JAMB Principles of Accounts 2003

C: Institute of Chartered Accountants of Nigeria and the Association of National Accountants of Nigeria

ICAN and ANAN are Nigeria’s two professional accountancy organisations with statutory professional mandates. Their respective enabling Acts underpin their membership and qualification responsibilities.

A: ₦9,700

Credits total capital ₦2,000 plus sales ₦6,700 plus creditors ₦1,000 = ₦9,700. Debits, including drawings ₦1,000, equal the same amount.

D: ₦1,000

Drawings are stipulated as half the ₦2,000 capital. The withdrawal is therefore ₦2,000 × 50% = ₦1,000, recorded separately from business expenses.

C: ₦1,000

The ₦19,000 cash sales represent 95% of all sales. Total sales are ₦20,000, and the remaining 5% are credit sales of ₦1,000.

B: bank and credit cash

Banking cash transfers money from cash in hand to the bank. Debit bank for the increase and credit cash for the decrease; this is a contra entry in the cash book.

B: Substance over form

Substance over form means faithfully representing the economic substance of a transaction. Its accounting treatment should reflect that substance rather than legal form alone.

D: cash account and bank account

A transfer between cash in hand and bank has both entries within the cash book. Its cash and bank columns record the opposing sides of this contra transaction.

C: ₦1,000 + ₦500 = ₦1,500

The accounting equation is capital plus liabilities equals assets. Here ₦1,000 + ₦500 = ₦1,500, showing how the assets are financed.

A: I and II

Assets may be arranged by liquidity, from easiest to convert into cash, or by permanence, beginning with longer-held assets. Vertical and horizontal describe presentation layouts.

A: The profit and loss account and a credit to provision for discount allowed

Creating the allowance charges profit and loss and credits the separate provision account. This estimates discounts expected to be allowed without directly reducing each customer’s ledger balance.

C: ₦2.20

Total purchase cost is ₦400 + ₦400 + ₦600 + ₦800 = ₦2,200 for 1,000 units. Periodic weighted average is therefore ₦2.20 per unit; issue dates do not alter this period-wide average.

C: ₦5,000

Credit purchases are ₦12,000. Credits total ₦18,500 and debits before balancing total ₦13,500. The difference is a closing creditor balance of ₦5,000.

D: ₦12,000

The question specifies credit purchases as 150% of the ₦8,000 cash paid to suppliers. Multiplying ₦8,000 by 1.5 gives credit purchases of ₦12,000.

B: sales department

Advertising promotes demand for the product and supports selling activity. Its expense is therefore charged to the sales function rather than production, purchasing or general administration.

B: production, selling, distribution and administration

Functional overhead classification groups indirect costs by production, selling, distribution and administration. Materials and wages are cost elements rather than additional functional categories.

B: ₦3,000

Raw materials available are opening stock ₦2,000 plus purchases ₦38,000. Deduct the ₦37,000 issued to production to leave ₦3,000; wages do not form raw-material stock.

A: ₦54,600

Materials consumed equal opening materials plus purchases less closing materials. Thus ₦3,500 + ₦56,000 − ₦4,900 = ₦54,600; labour and overhead are separate costs.

C: ₦155,000

Only actual receipts and payments enter this account. Cash received ₦260,000 less clubhouse payment ₦100,000 and electricity ₦5,000 leaves ₦155,000; unpaid items do not affect it.

B: ₦293,000

Accrual income includes all ₦300,000 ticket sales. Electricity ₦5,000 and salaries owed ₦2,000 are expenses, leaving ₦293,000. Buying fixed assets is capital expenditure.

D: ₦83,000

Assets total ₦70,000 + ₦58,000 + ₦100,000 = ₦228,000. Creditors and bank loan total ₦145,000, so opening capital is the ₦83,000 difference.

B: Cash book

A receipts and payments account summarises cash-book transactions under useful headings. It records actual cash movements, including capital items, rather than only accrued income and expenses.

D: ₦215,000

Opening debtors plus credit sales less collections equals closing debtors. Rearranging gives ₦225,000 + ₦15,000 − ₦25,000 = ₦215,000 credit sales.

D: 5,040,000

Shares settle the remaining 70% of ₦3,600,000, which is ₦2,520,000. Dividing that consideration by ₦0.50 per share gives 5,040,000 shares.

C: ₦1,626

Operating expenses are rates and insurance ₦188, wages ₦913, rent ₦325 and sundry expenses ₦200. Adding them gives ₦1,626; stock and remittances are not these expenses.

B: ₦30,000

Net assets taken over are ₦50,000 + ₦10,000 + ₦30,000 + ₦30,000 − ₦30,000 = ₦90,000. Consideration of ₦120,000 exceeds this by ₦30,000 goodwill.

B: ₦90,000

Exclude the seller’s cash because it is not acquired. The remaining assets total ₦120,000; deduct creditors ₦30,000 to obtain acquired net assets of ₦90,000.

C: profit and loss account

The branch adjustment account establishes gross profit. This is carried into the branch profit and loss account, where branch expenses are deducted to determine net profit.

C: ₦1,200

Payments per subscribed share total ₦1.30, including a ₦0.50 premium. The capital element is therefore ₦0.80 per share, giving ₦1,200 for 1,500 shares; premium is recorded separately.