JAMB Principles of Accounts 2003 past questions and answers

Which of the following is used to update the cash book in bank reconciliation?

1. A.Interest received and unpresented cheques
2. B.Commission and debit note
3. C.Unpresented cheques and direct credit
4. D.Interest received and direct credit

The two legally recognized professional accounting bodies in Nigeria are the

1. A.Institute of Certified Public Accountants of Nigeria and the Institute of Cost and Management Accountants of Nigeria
2. B.Association of Accountants of Nigeria and the Institute of Management Accountants of Nigeria
3. C.Institute of Chartered Accountants of Nigeria and the Association of National Accountants of Nigeria
4. D.Nigerian Accounting Association and the Executive Cost and Management Accountants of Nigeria.

Verifiability in accounting is only possible when there are

1. A.minutes of meetings
2. B.payment vouchers
3. C.source documents
4. D.audit certificates

Use the information below to answer questions 4 and 5.
(₦)
Capital 2 000
Bank 1 200
Purchases 2 500
Sales 6 700
Stock 1 300
Creditors 1 000
Fixed assets 3 700
Drawings ?
Drawings are always estimated at 50% of capital
The trial balance total is

1. A.₦9 700
2. B.₦8 700
3. C.₦7 900
4. D.₦7 800

Use the information below to answer questions 4 and 5.
(₦)
Capital 2 000
Bank 1 200
Purchases 2 500
Sales 6 700
Stock 1 300
Creditors 1 000
Fixed assets 3 700
Drawings ?
Drawings are always estimated at 50% of capital
Compute the amount withdrawn

1. A.₦2 000
2. B.₦1 500
3. C.₦1 250
4. D.₦1 000

Use the information below to answer questions 6 and 7.
Ezekiel Malgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of ₦19 000 from the business tray and banked it.
The credit sales for the period would be

1. A.₦5 000
2. B.₦1 900
3. C.₦1 000
4. D.₦950

Use the information below to answer questions 6 and 7.
Ezekiel Malgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of ₦19 000 from the business tray and banked it.
The transaction would be recorded in the cash book as debit

1. A.cash and credit bank
2. B.bank and credit cash
3. C.cash and credit cash
4. D.bank and credit bank

Which accounting concept supports the assertion that economic reality takes precedence over legal issues?

1. A.Realization concept
2. B.Substance over form
3. C.Conservatism
4. D.Measurement concept

The transaction that completes its double entry in the same ledger account appears in

1. A.cash account and personal account
2. B.bank account and general ledger
3. C.discount received and discount allowed
4. D.cash account and bank account

Given:
Capital ₦1 000
Liabilities ₦500
Assets ₦1 500
The accounting equation can be expressed as

1. A.₦1 000 + ₦500 + ₦1 500 = ₦3 000
2. B.₦1 000 − ₦500 + ₦1 500 = ₦2 000
3. C.₦1 000 + ₦500 = ₦1 500
4. D.₦1 500 + ₦500 = ₦2 000

The recording phase of accounting is known as

1. A.bookkeeping
2. B.trial balancing
3. C.ledger accounting
4. D.final accounting

Use the information below to answer questions 12 and 13.
Motor Vehicle Account as at 31st December, 2001 (₦)
Debit:
Jan. 1, cost 1 950 000
Dec. 31, Addition 400 000
Credit:
Jan. 1, Depreciation 1 360 000
June 30, Sales proceeds 700 000
The vehicle sold was purchased on January 1, 1998 at a cost of ₦1,000 000 and had depreciated at 25% on cost.
Assuming that depreciation is charged on the addition of the year at the rate of 15% on reducing balance, what should be the net book value of the vehicle as at 31st December 2003?

1. A.₦111 000
2. B.₦280 000
3. C.₦289 000
4. D.₦340 000

Given:
I. Order of performance
II. Order of liquidity
III. Vertical order
IV. Horizontal order
The orders in which a balance asset is arranged are

1. A.I and II
2. B.I and IV
3. C.II and III
4. D.III and IV

Use the information below to answer questions 15 and 16.
(₦ Dr; ₦ Cr)
Capital — ; 24 000
Land and building 18 470
Mortgage on premises — ; 11 090
Drawings 3 000
Profit and loss — ; 3 600
Furniture and fittings 5 120
Motor Vehicles 3 462
Closing Stock 3 000
Debtors 11 474
Creditors — ; 7 354
Cash 1 518
Totals 46 044 ; 46 044
What is the capital employed?

1. A.₦44 600
2. B.₦43 052
3. C.₦43 044
4. D.₦38 600

Use the information below to answer questions 15 and 16.
(₦ Dr; ₦ Cr)
Capital — ; 24 000
Land and building 18 470
Mortgage on premises — ; 11 090
Drawings 3 000
Profit and loss — ; 3 600
Furniture and fittings 5 120
Motor Vehicles 3 462
Closing Stock 3 000
Debtors 11 474
Creditors — ; 7 354
Cash 1 518
Totals 46 044 ; 46 044
Calculate the value of fixed assets

1. A.₦15 992
2. B.₦18 470
3. C.₦27 000
4. D.₦27 052

Provision for discount allowed can be recorded as a debit to

1. A.the profit and loss account and a credit to provision for discount allowed
2. B.provision for discount allowed and a credit to the profit and loss account
3. C.discount allowed and a credit to the profit and loss account
4. D.expenses and a credit to customers' account

Use the information below to answer questions 18 and 19.
Date — Details
Feb 1 Purchased 400 units at ₦1.00 each
Feb 5 Purchased 200 units at ₦2.00 each
Feb 10 Purchased 200 units at ₦3.00 each
Feb 15 Issued 320 units
Feb 20 Purchased 200 units at ₦4.00 each
Feb 25 Issued 120 units
Calculate the price per unit of closing stock using the periodic weighted average method.

1. A.₦3.20
2. B.₦3.00
3. C.₦2.20
4. D.₦2.00

Use the information below to answer questions 20 and 21.
Purchases ledger control account
Debit (₦): Discount received 1 000; Bills payable 1 500; Cash paid to suppliers 8 000; Returns outwards 3 000; Balance c/d ?
Credit (₦): Balance b/d 2 900; Credit purchases ?; Bills payable dishonoured 1 600; Dishonoured cheques 2 000
Credit purchases are always put at 150% of the total cash paid to suppliers
Calculate the closing balance of the ledger account

1. A.₦6 900
2. B.₦6 400
3. C.₦5 000
4. D.₦4 000

Use the information below to answer questions 20 and 21.
Purchases ledger control account
Debit (₦): Discount received 1 000; Bills payable 1 500; Cash paid to suppliers 8 000; Returns outwards 3 000; Balance c/d ?
Credit (₦): Balance b/d 2 900; Credit purchases ?; Bills payable dishonoured 1 600; Dishonoured cheques 2 000
Credit purchases are always put at 150% of the total cash paid to suppliers
Determine the credit purchases

1. A.₦15 500
2. B.₦13 500
3. C.₦13 400
4. D.₦12 000

In a control account, provision for bad debts is found on the

1. A.debit side of the purchases ledger control account
2. B.debit side of the sales ledger control account
3. C.credit side of the purchases ledger control account
4. D.credit side of the sales ledger control account

The stock valuation data is important because it enables management to

1. A.separate debtors from creditors
2. B.determine the cost of stock at the end of business
3. C.determine the cost of stock at the beginning of business
4. D.determine the total cost of goods purchased

During the year ended 31st December 2001, Nuju Enterprises paid rent as follows:
Jan. 20 ₦24 000 for a period of 4 months
May 16 ₦30 000 for a period of 5 months
Oct. 15 ₦36 000 for a period of 6 months
What is the overpaid portion of the rent?

1. A.₦36 000
2. B.₦18 000
3. C.₦12 000
4. D.₦6 000

Advertising expenses incurred on a product in a business organization should be charged to

1. A.production department
2. B.sales department
3. C.administration department
4. D.purchases department

Four broad classifications of overheads are

1. A.production, selling, distribution and material
2. B.production, selling, distribution and administration
3. C.selling, distribution, production and wages
4. D.distribution, selling, administration and material

Given:
Cost of raw material issued to production ₦37 000
Opening stock of raw material ₦2 000
Purchases of raw material ₦38 000
Wages ₦5 000
What is the closing stock of raw material?

1. A.₦4 000
2. B.₦3 000
3. C.₦2 000
4. D.₦1 000

Use the information below to answer questions 28 and 29.
PQ Manufacturing Company (₦)
Raw materials (1/1/2001) 3 500
Raw materials (31/12/2001) 4 900
Purchase of raw materials 56 000
Salary 63 000
Wages 148 050
Factory lighting 3 080
Plant Depreciation 2 800
Factory Insurance 2 170
The overhead cost is

1. A.₦71 050
2. B.₦68 250
3. C.₦67 970
4. D.₦66 080

Use the information below to answer questions 28 and 29.
PQ Manufacturing Company (₦)
Raw materials (1/1/2001) 3 500
Raw materials (31/12/2001) 4 900
Purchase of raw materials 56 000
Salary 63 000
Wages 148 050
Factory lighting 3 080
Plant Depreciation 2 800
Factory Insurance 2 170
The company consumed raw materials worth

1. A.₦54 600
2. B.₦56 000
3. C.₦57 400
4. D.₦59 500

Income and expenditure account is more informative than receipts and payments account because it discloses

1. A.cash
2. B.cheques
3. C.debtors
4. D.stocks

A company has two departments X and Y. Y transferred goods to X at a profit margin of 25%. ₦10 000 worth of goods was not sold at the end of the accounting period. How much is the unrealized profit?

1. A.₦2 000
2. B.₦2 500
3. C.₦12 000
4. D.₦12 500

Given:
Rich Social Club (₦)
Cash 100 000
Loan 30 000
Subscription in arrears 5 000
Subscription in advance 15 000
What is the accumulated fund?

1. A.₦60 000
2. B.₦80 000
3. C.₦90 000
4. D.₦110 000

A company has departments M and N. The expense incurred wholly in M is ₦5 000. General expenses incurred amount to ₦25 000. Expenses are apportioned in the ratio 2:3 for departments M and N respectively. What is N's share of the expenses?

1. A.₦10.000
2. B.₦15 000
3. C.₦18 000
4. D.₦20 000

Use the information below to answer questions 34 and 35.
(₦)
Total sales of ticket 300 000
Amount received from the sales 260 000
Cash purchase of club house 100 000
Credit purchase of equipment 60 000
Electricity bill paid 5 000
Salaries owed 2 000
What is the receipts and payment account balance?

1. A.₦260 000
2. B.₦233 000
3. C.₦155 000
4. D.₦100 000

Use the information below to answer questions 34 and 35.
(₦)
Total sales of ticket 300 000
Amount received from the sales 260 000
Cash purchase of club house 100 000
Credit purchase of equipment 60 000
Electricity bill paid 5 000
Salaries owed 2 000
What is the balance of the income and expenditure account?

1. A.₦300 000
2. B.₦293 000
3. C.₦193 000
4. D.₦133 000

The first step in converting a single entry to a double entry system of bookkeeping is to prepare a

1. A.suspense account
2. B.statement of affairs
3. C.realization account
4. D.trial balance

Emeka Enterprises Statement of Affairs at start
Assets (₦): Cash 70 000; Inventory 58 000; Machines 100 000
Liabilities (₦): Creditors 85 000; Bank Loan 60 000
What is the capital at start?

1. A.₦53 000
2. B.₦63 000
3. C.₦73 000
4. D.₦83 000

Receipts and payments account is the summary of

1. A.income and expenditure
2. B.cash book
3. C.balance sheet
4. D.profit and loss

Given:
Total debtors b/d 31/12/99 ₦25 000
Cheques received from debtors ₦255 000
Total debtors c/d 31/12/00 ₦15 000
Determine the sales figure.

1. A.₦295 000
2. B.₦265 000
3. C.₦245 000
4. D.₦215 000

Which of these is a capital expenditure warrant?

1. A.Provisional general warrant
2. B.Development fund general warrant
3. C.Reserved expenditure general warrant
4. D.Supplementary warrant

For the purpose of conversion of a partnership to a company, a total purchase consideration of ₦3.6m was paid. If 30% of the purchase consideration was in cash and the rest by 50k shares, how many shares were issued?

1. A.1 080 000
2. B.2 160 000
3. C.3 600 000
4. D.5 040 000

Given:
I. the consolidated revenue fund balance b/d ₦650 000
II. issues from contingency fund amounted to ₦240 000
III. amount transferred to contingency fund is ₦210 000
What is the consolidated revenue fund balance?

1. A.₦1 100 000
2. B.₦680 000
3. C.₦440 000
4. D.₦410 000

Use the information below to answer questions 43 and 44.
(₦)
Goods from head office 13 400
Returns to head office 118
Rates and insurance paid 188
Wages paid 913
Cash remitted to head office 16 625
Stock at 1/1/2000 1 875
Rent paid 325
Stock at 31/12/2000 1 975
Sundry expenses 200
The profit realized from the trade is

1. A.₦4 069
2. B.₦1 817
3. C.₦1 440
4. D.₦1 328

Use the information below to answer questions 43 and 44.
(₦)
Goods from head office 13 400
Returns to head office 118
Rates and insurance paid 188
Wages paid 913
Cash remitted to head office 16 625
Stock at 1/1/2000 1 875
Rent paid 325
Stock at 31/12/2000 1 975
Sundry expenses 200
What is the total expenses?

1. A.₦1 875
2. B.₦1 764
3. C.₦1 626
4. D.₦1 426

The necessary accounts to be opened on the issue of ordinary share capital are

1. A.preference share capital, cash and allotment accounts
2. B.bank and ordinary share capital accounts
3. C.cash and ordinary share capital accounts
4. D.nominal value and ordinary share capital accounts

The amount of each invoiced goods sent to the branch is debited to

1. A.branch expense account and credited to branch debtors' account
2. B.branch stock account and credited to the goods sent to branch account
3. C.branch debtors' account and credited to branch expense account
4. D.goods sent to branch account and credited to branch expense account

Use the information below to answer questions 47 and 48.
ZEBRA PLC Balance sheet as at 31st March, 2002
Capital ₦100 000; Current liabilities: Creditors ₦30 000; Total ₦130 000
Fixed assets: Land and buildings ₦50 000, Furniture ₦10 000 (₦60 000); Current assets: Stock ₦30 000, Debtors ₦30 000, Cash ₦10 000 (₦70 000); Total ₦130 000
The business was acquired on 1st April, 2002 at a purchase consideration of ₦120 000 by SOZ. All assets and liabilities were taken over except the cash. To open the new firm's bank account, additional ₦20,000 was paid into the bank.
The goodwill on purchase is

1. A.₦90 000
2. B.₦30 000
3. C.₦19 000
4. D.₦18 000

Use the information below to answer questions 47 and 48.
ZEBRA PLC Balance sheet as at 31st March, 2002
Capital ₦100 000; Current liabilities: Creditors ₦30 000; Total ₦130 000
Fixed assets: Land and buildings ₦50 000, Furniture ₦10 000 (₦60 000); Current assets: Stock ₦30 000, Debtors ₦30 000, Cash ₦10 000 (₦70 000); Total ₦130 000
The business was acquired on 1st April, 2002 at a purchase consideration of ₦120 000 by SOZ. All assets and liabilities were taken over except the cash. To open the new firm's bank account, additional ₦20,000 was paid into the bank.
Calculate the networth of the business

1. A.₦120 000
2. B.₦90 000
3. C.₦80 000
4. D.₦30 000

Gross profit in the branch adjustment account is transferred to the

1. A.trading account
2. B.receipts and payments account
3. C.profit and loss account
4. D.income and expenditure account

Mamsa Nigeria Limited issued 20 000 ordinary shares of ₦1.50 per share on 2nd July 2002. 1 500 ordinary shares were fully subscribed for and their monies received as below:
On application ₦0.40
On allotment ₦0.20
First call (including premium of ₦0.50) ₦0.70
The last and final call was yet to be made.
What is the balance of the ordinary share capital account after the first call was received?

1. A.₦300
2. B.₦1 050
3. C.₦1 200
4. D.₦1 950