Principles of Accounting (2017 | Study Mode

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Question 21
A
I,II and IV
B
II,III and IV
C
III and IV
D
I,II and III
Explanation
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

Correct option: B
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Question 22
A
?110 000
B
? 80 000
C
? 90 000
D
? 30 000
Explanation
\(\begin{array}{c|c} \text{Assets} & N \\ \hline \text{Plant and Machinery} & 190 000 \\ \hline \text{Motor Vehicle} & 170 000 \\ \hline \text{Stock} & 60 000 \\ \hline & 420,000 \\ \hline \text{Less Liabilities} & 50 000 \\ \hline \text{Value / Net worth of the business} & 370,000\end{array}\)

Purchase Consideration less worth of the business
400,000 - N 370,000

= N30,000

Goodwill is an asset that can not be seen or touched. It is referred to as intangible asset.
Goodwill is generated as may be the good name ot the business, confident of the customers an the product of the business. It is quantifiable by the management an monetary terms.

Correct option: D
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Question 23
A
Sales
B
issue
C
purchases
D
requisition
Explanation

Explanation not provided, please join discuss, your contributions are welcomed


Correct option: B
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Question 24
A
it enable the organization to determine the branch that is making either profit or loss
B
it allows proper control over the branch by the head office
C
it assist the organization to determine the performance of a branch manager
D
it allows fraud and wastage of resources
Explanation
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

Correct option: D
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Question 25
A
increased financial activities
B
government intervention
C
credit as a factor in business
D
Payment for goods in cash
Explanation

Explanation not provided, please join discuss, your contributions are welcomed


Correct option: A
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Question 26
A
Income and expenditure account
B
profit and loss account
C
receipts and payment account
D
Non profit account
Explanation
Income and expenditure : This is the type of account that operate same features as the profit and loss account it takes in consideration all arrears and prepayments

Correct option: A
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Question 27
A
it serves-as a control during inflation
B
it is calculated at the end of the year
C
it is progressive in nature
D
its flow of cost is in sequence with the flow of stock.
Explanation
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

Correct option: D
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Question 28
A
Managers
B
Customers
C
Suppliers
D
Staff of the company
Explanation
Customer: customers are the one that enjoys discount allowed. It is allowed to them by the suppliers. it can be in cash or trade

Correct option: B
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Question 29
A

21,901

B

19,021

C

21,109

D

21,091

Explanation

Bank reconciliation statement helps to reconcile the cashbook and bank statement if there are disagreement
A is correct: 21,901 is correct because the cheque wrongly debited by the bank will have increase the bank balance therefore to get the value of the bank statement needed to first of all add back the cashbook


Correct option: A
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Question 30
A
sales
B
carriage outward
C
carriage inward
D
opening stock
Explanation
carriage outward: it is the cost of transporting goods from the company to the buyer. it is on debit side of the profit and loss account because it is an expenses incurred on distributing the goods to customer.

Correct option: B

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