2024 - JAMB Accounting Past Questions and Answers - page 3

The opening stock at the beginning of an accounting period represents the goods available for sale at the start of that period. These are the unsold goods from the previous period.

Rent accrued at the end of an accounting period represents an expense that has been incurred but not yet paid. This creates a liability for the business. Since this liability is usually due within one year, it is classified as a current liability.

To calculate the total expenses, we add all listed expenses:

Salaries: 1500
Rejection in doubtful debts: 500
Office expenses: 1100
Other expenses: 1300

Total Expenses = 1500 + 500 + 1100 + 1300 = 4400

Ordinary shares represent the ownership stake in a company. Equity is the general term for the owners' stake in a business. Therefore, ordinary shares are a type of equity.

When a share issue is over-subscribed, there is more demand than available shares. Directors usually allocate shares using the pro-rata method, meaning each applicant receives a proportion of the shares they applied for.

A limited liability company is legally separate from its owners. This means the company's liabilities are separate from those of its shareholders.

The cash book is both a subsidiary book and a ledger. It records all cash transactions and functions like a ledger because it has debit and credit sides.

The ledger containing accounts of debtors and creditors is the personal ledger because it records individuals or entities that owe money or are owed money.

The raw materials available for production is calculated as:

Opening Raw Materials: 2000
Raw Materials Purchased: 18000

Total = 2000 + 18000 = 20000

The closing stock is not included in this calculation.

To calculate raw materials consumed, we use:

Opening Stock + Purchases - Closing Stock

Opening Stock: #20,000
Purchases: #18,000
Closing Stock: #500

#20,000 + #18,000 - #500 = #37,500