2024 - JAMB Accounting Past Questions and Answers - page 1

To calculate the net profit as a percentage of expenses:

1. Calculate Total Expenses:
Administrative Expenses: ₦16,800
Selling Expenses: ₦15,000
Other Overhead Expenses: ₦6,200
Total Expenses = ₦38,000

2. Net Profit: ₦25,000

3. Net Profit Percentage:
\((\text{Net Profit} / \text{Total Expenses}) \times 100\)
\((25,000 / 38,000) \times 100 = 65.79\%\)

The basic accounting equation is:

Assets = Liabilities + Owner's Equity

None of the provided options correctly states this equation.

The accounting equation states that:

Assets = Liabilities + Owner's Equity

The difference between assets and liabilities represents capital (owner's equity).

In the absence of a partnership agreement, the legally recognized interest rate on a partner’s loan is 5% per annum.

To calculate gross profit:

Cost of Goods Sold (COGS)
COGS = Opening Stock + Purchases - Closing Stock
\(10,000 + 70,000 - 15,000 = 65,000\)

Gross Profit
Gross Profit = Sales - COGS
\(120,000 - 65,000 = 55,000\)

Thus, the gross profit is ₦55,000.

The difference between the cost of production and the market price is credited to the manufacturing account, as it represents manufacturing profit.

To calculate credit sales:

\(\text{Credit Sales} = \text{Closing Debtors} + \text{Cash Received} + \text{Discount Allowed} - \text{Opening Debtors}\)
\(= 6000 + 10000 + 500 - 2000 = 10,500\)

Total Sales = ₦10,500

Common stock valuation methods include:

• First-In, First-Out (FIFO)
• Last-In, First-Out (LIFO)
• Weighted-Average Cost
• Specific Identification

None of the provided options are valid stock valuation methods.

Depreciation is the reduction in the value of a fixed asset due to wear and tear, usage, obsolescence, or the passage of time.

Expenditure items:

Salaries: ₦15,000
Vehicles Fueling: ₦7,000
Hospital Beds: ₦8,000
Ambulance: ₦13,000

Total Expenditure:
\(15,000 + 7,000 + 8,000 + 13,000 = 43,000\)