📒 1994

JAMB Principles of Accounts 1994 past questions

49 questions from the 1994 JAMB UTME Principles of Accounts paper. Free, with answers where available.

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Principles of Accounts JAMB 1994 Q1 ✓ Answer: C
The term ‘accounting period’ is used to refer to the
A
time span during which taxes are paid to the Inland Revenue Board
B
Budget period, usually one year, relied on by the accountant
C
time span, usually one year covered by financial statement
D
period within which debtors are expected to settle accounts.
Principles of Accounts JAMB 1994 Q1 ✓ Answer: C
Which of the following factors’ has aided the develop- ment of Accounting?
A
The emergency of nation states
B
The discovery of mineral resources in commercial quantity.
C
The growth in size of businesses and the separation of ownership and management.
D
The development and management of a sophisticated monetary system.
Principles of Accounts JAMB 1994 Q2 ✓ Answer: C
Assigning revenues to the accounting period in which goods were sold or services rendered and expenses in- curred is known as
A
passing of entries
B
consistency convention
C
matching concept
D
adjusting for revenue.
Principles of Accounts JAMB 1994 Q2 ✓ Answer: A
Which of the following concepts stipulates that account- ing profit is the difference between revenue and expenses?
A
Accrual concept
B
Conservation Concept
C
Prudence Concept
D
Materiality concept.
Principles of Accounts JAMB 1994 Q3 ✓ Answer: D
The accounting convention which states that ‘profit must not be recognized until realized while all losses should be adequately provided for’ is termed
A
materiality
B
objectivity
C
consistency
D
conservatism.
Principles of Accounts JAMB 1994 Q3 ✓ Answer: C
An effective accounting system should provide infor- mation
A
on new products and methods
B
for customer feedback and requirements
C
on internal and external reporting for managers and third parties
D
for promoters, directors, labour unions and distributors.
Principles of Accounts JAMB 1994 Q4 ✓ Answer: A
Accounting information is used by investors and credi- tors of a company to predict
A
future cash flows of the company
B
future tax payments of the company
C
potential merger candidates for the company
D
appropriate remuneration for the company’s staff.
Principles of Accounts JAMB 1994 Q6 ✓ Answer: A
When a business incurs labours cost in installing a fixed asset, the cost is treated as
A
additional cost to the asset
B
business wages and salaries
C
installation cost of the asset
D
business cost of the asset.
Principles of Accounts JAMB 1994 Q7 ✓ Answer: B
What is the cardinal rule of the double entry system?
A
Debit the increasing account and credit the decreasing account.
B
Debit the receiving account and credit the giving account.
C
Debit the asset account and credit the liability account.
D
Debit the revenue account and credit the expenditure account.
Principles of Accounts JAMB 1994 Q8 ✓ Answer: C
Malam Gambo bought a freezer for his shop costing N 10,500. In recording, he debited office expenses account and credited the bank account. What book keeping error has he committed?
A
Error of commission
B
Error of reversal of entries.
C
Error of principle.
D
Compensation er- ror.
Principles of Accounts JAMB 1994 Q9 ✓ Answer: A
The use of the folio in the ledger is for
A
Referencing purposes
B
Particulars of the transaction
C
the account titles
D
Only credit items.
Principles of Accounts JAMB 1994 Q10 ✓ Answer: C
Account of Tanko Nig Ltd. Dr. Cr. N N 1/10 Bal. b/f 5,000 2/10 Cash 3,000 Sales 10,000 15/10 Bank 6,500 What is the closing balance of the account shown above?
A
N 5,000
B
N 6,500
C
N 5,500
D
N 15,000.
Principles of Accounts JAMB 1994 Q11 ✓ Answer: C
The suspense account is used to correct book keeping errors where the
A
amount involved is quite significant
B
item involved is not material
C
item involved is unknown
D
error does not affect the agreement of the trial balance.
Principles of Accounts JAMB 1994 Q12 ✓ Answer: C
The discount column of a three column cashbook is not balanced off but periodically transferred to the discount accounts because discounts.
A
are not important in cash book
B
are cash items only
C
do not form part of double entry
D
are used for bank reconciliation.
Principles of Accounts JAMB 1994 Q13 ✓ Answer: B
When is a petty cash account debited?
A
When the fund is established and every time money is spent
B
when the fund is established and every time it is replenished
C
when the fund is established and when the size of the float is decreased
D
Every time money is drawn from the petty cash.
Principles of Accounts JAMB 1994 Q14 ✓ Answer: D
When preparing a bank reconciliation statement, which of the following is deducted from the balance per bank statement?
A
Bank charges.
B
Uncleared cheques
C
returned cheques
D
Unpresented cheques.
Principles of Accounts JAMB 1994 Q15 ✓ Answer: C
The financial position of an organization at a particular time can be ascertained from the
A
statement of sources and application of funds
B
statement of retained earnings
C
balance sheet
D
profit and loss account. [PAGE 3]
Principles of Accounts JAMB 1994 Q16 ✓ Answer: A
Given: N Purchase 20,000 Sales 40,000 Carriage inwards 5,000 Carriage outwards 5,000 Opening stock 10,000 Closing stock 5,000 What is the cost of good sold?
A
N 30,000
B
N 25,000
C
N 20,000
D
N 15,000
Principles of Accounts JAMB 1994 Q17 ✓ Answer: D
The net profit or loss for the year is determined in the profit and loss account after
A
deducting purchases from sales
B
deducting cost of goods sold from sales and adding administrative expenses
C
adding commissions received to gross profit
D
eliminating all expenses from gross profit and adding any other income. Use the table below to answer question 18 and 19 Stock Cost price Qty (units) N Opening balance1/1/90 3.00 3,000 Purchases January 3.50 15,000 Purchases February 4.00 25,000 Sales January 4.50 13,000 Sales February 5.00 28,000
Principles of Accounts JAMB 1994 Q18 ✓ Answer: B
Using LIFO, determine the value of closing stock.
A
N 9,600
B
N 7,600
C
N 6,000
D
N 2,000.
Principles of Accounts JAMB 1994 Q19 ✓ Answer: B
What is the gross profit at the end of February, if the closing stock were valued at N 20,000?
A
N 65,000
B
N 57,000
C
N 48,000
D
N 37,000.
Principles of Accounts JAMB 1994 Q21 ✓ Answer: A
If a bad debt previously written off is subsequently repaid, the amount collected is recorded as an
A
income in the profit and loss account
B
income in the balance sheet
C
addition cash in the profit and loss account
D
expense in the balance sheet.
Principles of Accounts JAMB 1994 Q22 ✓ Answer: D
Beginning and ending accounts receivable balances were N 8,000 and N 15,000 respectively. If collections from customers during the period were N 36,000, them total sales on account would be
A
N 23,000
B
N 29,000
C
N 36,000
D
N 43,000.
Principles of Accounts JAMB 1994 Q24 ✓ Answer: C
Compute the capital as at 1st January 1993.
A
N29,800
B
N28,900
C
N26, 700
D
N20,800.
Principles of Accounts JAMB 1994 Q25 ✓ Answer: B
Determine his net profit as at 31st December 1993.
A
N2,000
B
N2,200
C
N3,500
D
N4,200.
Principles of Accounts JAMB 1994 Q26 ✓ Answer: B
Which of the following categories of labours cost will be classified as direct?
A
Accountant’s salary
B
Factory workers’ salary
C
Managing director’s salary
D
Cashier’s salary. Use the information below to answer questions 27 and Unit Unit Total Unit Cost Cost Sold N N Begining inventory 20 Sale No. 1 Purchase No. 1 30 Sales No. 2 Purchase No 2 Total
Principles of Accounts JAMB 1994 Q27 ✓ Answer: C
Using the FIFO method of stock valuation, the ending inventory cost is
A
N 146
B
N 165
C
N 186
D
N 314
Principles of Accounts JAMB 1994 Q28 ✓ Answer: C
Using the LIFO inventory procedures, the ending inventory cost is
A
N136
B
N 176
C
N 196
D
N 264
Principles of Accounts JAMB 1994 Q29 ✓ Answer: B
The major difference between the receipt and payment account and the income and expenditure ac- count is that while the former
A
is kept by the treasurer, the latter is not
B
deals with all receipt and payments in the year regardless of the time it relates to the latter is for just that year
C
is a T-account the latter is not
D
is not in the ledger, the latter is. [PAGE 4]
Principles of Accounts JAMB 1994 Q30 ✓ Answer: D
The following information relates to a hockey club: N Subscription owing at the beginning Subscription owing at the end Subscription received in the advance at the beginning Subscription received During the period 2,560 The amount to be shown in the income and expenditure account would be
A
N 2,500
B
N 2,540
C
N 2,570
D
N 2,590.
Principles of Accounts JAMB 1994 Q31 ✓ Answer: A
The net profit from the trading account of a non-profit making organization would be treated as income in the
A
income and expenditure account
B
receipt and payment account
C
balance sheet
D
statement of affairs Use the information below to answer questions 32 and 33. Ada and Udo are lawyers who went into partnership as Ado & Co. Ada brought cash of N12,000, furnishing worth N18,000 and a motor vehicle worth N70, 000 Udo on the other hand brought in cash N10,000, his building valued at N05,000 and a personal computer worth N135,000.
Principles of Accounts JAMB 1994 Q32 ✓ Answer: D
What is the capital of Ado & Co.?
A
N22,000
B
N100,000
C
N 150,000
D
N 250,000.
Principles of Accounts JAMB 1994 Q33 ✓ Answer: C
What is the profit sharing ratio if it is based on capital contributed by Ada and Udo?
A
2:1
B
3:2
C
2:3
D
1:2
Principles of Accounts JAMB 1994 Q34 ✓ Answer: B
The major distinguishing element between the final ac- counts of a partnership and a sole trader is the
A
drawings account
B
appropriation account
C
capital account
D
creditors account.
Principles of Accounts JAMB 1994 Q35 ✓ Answer: A
Good will appears in the books of a business only if it has been
A
purchased at a certain price
B
raised in connection with the admission of a new partner
C
raised to account for the true value of a business on the death of a partner
D
raised in order to prevent the balance sheet showing that the business is insolvent.
Principles of Accounts JAMB 1994 Q36 ✓ Answer: C
Kayode, Akpan and Kachalla are in partnership. Their respective capital accounts had the following balances: N40,000 N50,000 and N70,000. The partners agree to ad- mit Wamo as a new partner with a one-fifth interest in the partnership capital in exchange for N50,000 cash. Wamo’s equity in the resulting partnership is
A
N32,000
B
N50,000
C
N42,000
D
N50,000.
Principles of Accounts JAMB 1994 Q37 ✓ Answer: B
Under which of the following conditions is a partnership dissolved?
A
Change of the partnership’s head office.
B
Admission of a new partner.
C
Purchase of a large quatity of fixed assets.
D
Retirement of a manager who is not a partner.
Principles of Accounts JAMB 1994 Q39 ✓ Answer: D
What is the nominal value of each share?
A
N2
B
N0.80 C.N0.60
D
N0.50
Principles of Accounts JAMB 1994 Q40 ✓ Answer: B
What is the issued capital?
A
N40 million
B
N48 million
C
N50 million
D
N80 million.
Principles of Accounts JAMB 1994 Q41 ✓ Answer: B
The document setting out theregulations regarding shares, meetings and internal organization of a company is known as
A
memorandum of association
B
articles of association
C
prospectus
D
company law.
Principles of Accounts JAMB 1994 Q42 ✓ Answer: B
An advantage of using accounting ratio is that they
A
can be easily calculated
B
facilitate decision-making
C
are stipulated by law
D
show errors and frauds.
Principles of Accounts JAMB 1994 Q43 ✓ Answer: D
The accounts of Buba (Nig.) Plc showed the following for the year ended December 31, 1993: N Gross sales 219,900 Sales returns and allowances 4,900 Net sales 215,000 Accounts receivable (net): 1/1/93 20,000 31/12/93 30,000 The turnover of accounts receivable is
A
6.14 times per year B.8.14 times per year
C
8.60 times per year
D
8.64 times per year. [PAGE 5]
Principles of Accounts JAMB 1994 Q44 ✓ Answer: B
Given: Sales N20,000 Costs of sales N15,000 The gross profit margin would be
A
33.33%
B
25.00%
C
20.00%
D
14.28% Use the information below to answer questions 45 and Perebeni Enterprises has two departments A and B, with following information A B N N Open. Stock 5,000 1,500 Purchases 26,000 3,000 Close. Stock 7,000 2,500 Sales 45,000 4,000 The following expenses are to be shared in the ratio 4:1 Rent N 8,300 General Expenses N 3,200
Principles of Accounts JAMB 1994 Q45 ✓ Answer: D
What are the company’s gross profit for the year?
A
N11,500
B
N12,500
C
N20,000
D
N23,000.
Principles of Accounts JAMB 1994 Q46 ✓ Answer: C
What is the net profit (or loss) contributed by depart- ment B?
A
N 2,000
B
(N2,000)
C
(N 300)
D
N300.
Principles of Accounts JAMB 1994 Q47 ✓ Answer: D
The expenditure on a good or service which is consumed either immediately or within a current accounting period is called
A
fixed expenditure
B
capital expenditure
C
annual expenditure
D
recurrent expenditure
Principles of Accounts JAMB 1994 Q48 ✓ Answer: B
The receipts from a special tax levy to pay maturing inter- est obligation are recorded in
A
Capital Project Fund
B
Debt Service Fund
C
Tax Assessment Fund
D
Special Revenue Fund.
Principles of Accounts JAMB 1994 Q49 ✓ Answer: D
The cash basis of accounting requires the recognition of revenue only when they are
A
due
B
earned
C
paid
D
received.
Principles of Accounts JAMB 1994 Q50 ✓ Answer: A
The amount for individual items on a government budget is called a
A
vote
B
deposit
C
loan
D
grant. Principles of Account 1995