2022 - JAMB Accounting Past Questions and Answers - page 1
The correct posting in a double entry system of account when there is an increase in double assets, expenses, capital or liabilities is to debit
capital and debit liabilities
liabilities and credit assets
assets and credit capital
capital and credit assets
In a double-entry system, when there is an increase in assets or expenses, you debit them. Similarly, when there is a capital increase, you credit it. Therefore, the correct posting for an increase in assets or expenses is to debit them; for a capital increase, it is to credit. So, the correct option is to debit capital and credit assets.
The simplest form of single entry procedure consists of keeping a ___?
day book or general journal
cash book and ledger accounts showing debtors and creditors balances
cash journal, sales journal and purchases journal
day book in which transactions are described in chronological order
The excess of income over expenditure is usually transferred to the?
accumulated fund
profit and loss account
current assets in the balance sheet
current liabilities in the balance sheet
The excess of income over expenditure is usually transferred to the profit and loss account. In accounting, when a business has more income than expenses, it results in a profit. This profit is then transferred to the profit and loss account, which is a financial statement that summarizes the revenues, costs, and expenses incurred during a specific period. The profit and loss account helps in determining the overall financial performance of the business.
Use the information below to answer questions 25 and26.
Zazzau Company:
Cash in hand................N50
Cash in bank................N1 250
Stock.......................N4 880
Furniture...................N9 60
Building....................N5 500
Debtor......................N1 750
Creditors...................N2 150
Drawings of N125 were made by the shareholders of the company.
They company's net current assets amount to?
N5 780
N5 70
N6 580
N7 930
Net current assets are calculated by subtracting current liabilities from current assets.
Current assets include cash in hand, cash in bank, stock, and debtors, which sum up to N50 + N1,250 + N4,880 + N1,750 = N7,930.
Current liabilities include creditors, which amount to N2,150.
So, Net Current Assets = Current Assets - Current Liabilities
= N7,930 - N2,150
= N5,780
However, the question mentions that drawings of N125 were made by shareholders. This amount needs to be deducted from the Net Current Assets.
Therefore, Net Current Assets after deducting drawings = N5,780 - N125 = N6,580.
Hence, N6,580 is the correct answer.
Use the information below to answer question .
Statement of assets and liabilities as at 31st December, 2001.
Shareholders' interest N240
Current liabilities N20
Current assets N110
Fixed assets N140
What is the networking capital?
N90m
N70m
N100m
N80m
Let's recalculate the Net Working Capital:
Net Working Capital = Current Assets - Current Liabilities
Using the information provided:
Net Working Capital = N110m (Current Assets) - N20m (Current Liabilities)
Net Working Capital = N90m
So, the correct option is N90m.
Which of these is not method of stock valuation?
Which of the following is a debit item in the sales ledger control account
Cheque reciepts
Dishonoured cheques
Discount allowed
Bills recievable
In accounting, a sales ledger control account is used to track and summarize transactions related to accounts receivable. Debit and credit entries in this account depend on the nature of the transaction.
- Cheque receipts and Bills receivable are typically credit items as they represent inflows of cash or promises to pay in the future.
- Discount allowed is also a credit item, as it represents a reduction in the amount owed by a customer.
On the other hand, Dishonoured cheques are considered a debit item. When a customer's cheque is dishonoured, it means the payment is not accepted, resulting in a decrease in the amount owed by the customer. Therefore, it is a debit item in the sales ledger control account.
Hence, Dishonoured cheques is the correct answer.
The major point of agreement carried by the partnership deed is?
5% interest annum on any loan
an oral agreement among the partners
method of inhertance by the partners' children
the profit and loss sharing ratio of the partners
The major point of agreement carried by the partnership deed is the profit and loss sharing ratio of the partners.
The partnership deed is a legal document that outlines the terms and conditions of the partnership, including how profits and losses will be shared among the partners. It specifies the percentage or ratio in which the partners will distribute the financial outcomes of the business. This helps in maintaining transparency and avoiding disputes among the partners regarding the distribution of profits and losses.