2019 - JAMB Accounting Past Questions and Answers - page 5
A proprietor withdraws cash from the business for private use, he
credits cash account and debits bank account
credits cash account and debits drawing A/C
debits cash account and credits drawings account
debits bank account and credits drawings account
If a proprietor withdraws cash for private use, whether for himself or owner's use, this is regarded as drawings.
Therefore, the account involved in cash and drawings account. This means that the cash account gives while the drawings account receives.
The rules of double entry states that
for every debit entry, there must be a corresponding debit entry
for every credit entry, there must be a corresponding credit entry
all transactions must be recorded in two accounts, one account is debited and another is credited
all transaction must be credited
Double-entry bookkeeping, in accounting, is a system of book keeping where every entry to an account requires a corresponding and opposite entry to a different account. The double-entry has two equal and corresponding sides known as debit and credit. The left-hand side is debit and right-hand side is credit. Wikipedia
The difference between double entry and single entry is
double entry is based on the dual concept while single entry is not based on dual concept
double entry is an account while single entry is not an account
double entry keeps personal account while single does not
double entry is useful for business enterprise while single entry is not
Recording method: Single-entry bookkeeping gives a one-sided picture of transactions recorded in the cash register. In double entry, changes due to one transaction are reflected in at least two accounts.
Error detection: In double entry, debits and credits must always be the same.
A rent of ₦50,000 was paid by samson to his landlady by cheque. The double entry in Samson's book is
Debit rent account, Credit bank account
Debit Rent account, Credit Samson's account
Debit Bank account, Credit Rent account
Debit Samson's account, Credit Rent account
The rent account is debited while Samson's account is credited
The purpose of profit and loss account is to ascertain
Gross profit
Capital
Expenses
Net profit
An income statement or profit and loss account is one of the financial statements of a company and shows the company's revenues and expenses during a particular period. It indicates how the revenues are transformed into the net income or net profit. Wikipedia
Discount received is charge to
current account
profit and loss
trading account
balance sheet
A discount received is an income to the business. Therefore, it is credited to the profit and loss.
Use the question to answer this question:
| Opening stock | ₦ |
| Department A B |
100 800 |
| Purchases: A B Wages of workers Salaries |
1500 2000 50 100 |
| Sales A B |
3000 5000 |
Expenses are to be shared in the ratio of sales.
What was the cost of goods sold?
₦25,000
₦35,000
₦50,000
₦75,000
Cost of goods sold = opening stock + purchases - closing stocks
= 20,000 + 70,000 - 15,000
= ₦75,000
Use the following to answer this question
Opening stock Purchases Sales Closing Stocks |
₦ 20,000 70,000 100,000 15,000 |
What was the gross profit?
₦35,000
₦75,000
₦50,000
₦25,000
Gross profit = sales - cost of goods sold
= 100,000 - 75,000
= ₦25,000
An ordinary share of ₦100 was issued at ₦80. The share was issued at
premium
par
discount
loss
Share Issued at Discount is a stock issued at a price below its face value. For example, a share with par of $100 might be issued to an investor for $70. Shares issued at discount are rare because stocks almost never have face values anymore.
Shares that are offered to existing shareholders at a price is called
par
premium
right issue
bonus issue
A rights issue or rights offer is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it is a non-dilutive pro rata way to raise capital. Wikipedia