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Question 1 Principles of Accounting | JAMB/UTME (2018)
A

?7000

B

?10000

C

?22000

D

?15000

Explanation.

Capital Employed is the difference between the total assets and current liabilities of the company

Question 2 Principles of Accounting | JAMB/UTME (2018)
A
Sales department
B
Production department
C
Purchase department
D
Explanation.

Advertising expenses are expenses incurred in order to enhance the sales of the company’s product/services

Question 3 Principles of Accounting | JAMB/UTME (2018)
A
1:1
B
2:3
C
1:2
D
3:2
Explanation.

Acid test ratio measures the liquidity position of a company after deduction stock (inventory) from current assets

Formula: current assets less inventory/current liabilities

18000 - 4000/14000 = 1 : 1

Question 4 Principles of Accounting | JAMB/UTME (2018)
A
Price above or below the stipulated price
B
Any price but not below the transfer price
C
Cost price
D
A price that is equal to the mark up
Explanation.

Cost plus mark up is a pricing strategy in which the selling price is determined by adding a specific amount mark up to a product unit cost

Question 5 Principles of Accounting | JAMB/UTME (2018)
A
Accountant general
B
Finance minister
C
Auditor general
D
Permanent secretory.
Explanation.

Appropriation is the amount that government reserves for a particular purpose. Public expenditure is the spending made by government of a country on collective needs

Question 6 Principles of Accounting | JAMB/UTME (2018)
A
#20,500
B
#23,000
C
#28,000
D
#27,000
Explanation.

Average stock is the calculating the addition of stock at the beginning and at the end of the financial period and dividing the value by two.

It is the average value of products kept for sale during an accounting period.

Therefore:

Average stock = opening stock + closing stock/2

= 32000 + 9000/2

= 41000/2

=? 20500

Question 7 Principles of Accounting | JAMB/UTME (2018)
A
#61,000
B
#62,000
C
#58,000
D
#57,000
Explanation.

Cost of goods sold is the direct costs attributable to the production of the goods sold in a company.

Cost of goods available for sale (32000 + 39000) = 71000

Less closing stock = 9000

Cost of goods sold = 7100 - 9000

= 62000

Question 8 Principles of Accounting | JAMB/UTME (2018)
A
B
call in arrears
C
forfeiture
D
shares
Explanation.

is the amount called by the company which is not paid by the shareholders before the due date fixed for payment

Question 9 Principles of Accounting | JAMB/UTME (2018)
A
Goodwill account and credit partners capital account
B
Cash account and credit goodwill account
C
Goodwill account and credit cash account
D
Partners capital account and credit goodwill account
Explanation.

When goodwill is raised in the books at full value, the entry is

Dr Goodwill Account

Cr Old partners capital account (old ratio)

When the raised goodwill is written off, entry will be:

Dr All partners capital account

Cr Goodwill accounts

Note: goodwill written off includes new partners in the new profit sharing ratio

Question 10 Principles of Accounting | JAMB/UTME (2018)
A
#40,000
B
#41,500
C
#41,700
D
48,500
Explanation.

Trading, profit and loss account for the month ended 31/1/95

For the month ended 31/1/95

?                             ?

Sales                                                                                      8200

Cost of sales:

Purchases                                           15000

Closing stock                                      (10000)                (5000)

Gross profit                                                                        8200

Gross profit b/d                                                                8200

Sales commission                             500

Rent                                                    1000                     (1500)

Net profit                                                                            1700

WORKINGS:

Rent paid for 12 months                                                   12000

Rent paid for one month

12000 x 1/12                                                                      (1000)

Prepaid rent                                                                       11000

Balance sheet as at 31/1/95

Noncurrent asset:

Furnishing                                           10000

Ceiling fan                                           1500                      11500

Current asset:

Cash (see cash account)                     9200

Inventory                                             10000

Prepaid rent (see above)                    11000                          30200

41700

Capital                                                                                    40000

Net profit (see p&l)                                                                  1,700

41700

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