2017 - JAMB Accounting Past Questions and Answers - page 3

The receipts and payment account is one of the account of a non-profit oriented organization that performs the same functions as cash account in a profit oriented organization
all forms of payment since cash is involved will be recorded and also performs the same functions as the cashbook does for profit oriented organization

The movement of goods from a head office to a branch is recorded in the head office's books as an *issue*. This reflects the transfer of inventory from the head office's stock to the branch. The head office doesn't consider this a sale because the goods are still within the same company, nor is it a purchase or requisition.

The activities and resources of branches is strictly monitored by the head office and each branch is supplied according to its need so it will be difficult to commit fraud or waste any resources

The Income and Expenditure account in a non-profit organization serves a similar function to the Profit and Loss account in a profit-oriented business. It summarizes the organization's revenues and expenses over a specific period to determine its surplus (profit) or deficit (loss).

Before calculating the discount received in Dep. B

We need to calculate the percentage of purchases for Dep B

Out of the total purchases

Dep. A purchases 150,000

Dep. B purchases 250,000

400,000 - Total purchases

there4; \(\frac{250,000 \times 24,000}{\text{(Total discount received)}}\) x 400,000

= 15,000

The first in first out(FIFO) method of stock valuation, major advantage 1 it is very easy to apply 2 no manipulation of income is possible 3 the balance sheet amount for inventory is likely to approximate the current market value

its flow of cost is in sequence with the flow of stock: since the first stock will be considered for sale before other stock. the cost is always in sequence with the flow of stock because it correspondence with the normal physical flow of goods

Customer: customers are the one that enjoys discount allowed. It is allowed to them by the suppliers. it can be in cash or trade

To determine the discount allowed by Department A, the percentage of sales by Department A need to be calculated

Dep A 250,000

Dep B \(\frac{150,000}{400,000}\)

% of Dep A = \(\frac{250,000}{400000}\) X 100

= 62.5%

∴ Discount allowed in Dep A = \(\frac{62.5}{100}\) x 250,000

= ₦ 9,375

= ₦ 9,375

A branch account is a small part of business account operating with some degree of independence . It maintains its own personal/self accounting entries to determine the profit/loss made by a specific period of time

The accounting entries is to debit profit and loss account and credit branch stock. The profit and loss is debited because the cost of the stolen goods must be charged against the profit for the period to balance the account and the branch stock account is credited because the cost of the goods is out of the branch already.