2024 - JAMB Accounting Past Questions and Answers - page 8

Ordinary shares represent the ownership of a company and are a form of equity.

The correct term is vote. In government accounting, a vote is the amount of money approved by the legislature for expenditure by a specific department or agency, broken down into heads and sub-heads. It represents the formal allocation of funds.

An imprest is a small amount of money used for petty expenses, while allocation and float do not refer to the legislated fund assignment.

A limited partner is one whose liability is restricted to the amount of capital contributed. Unlike a general partner, a limited partner’s personal assets are not at risk for the debts of the partnership.

The net worth of a business represents the owners’ equity and is calculated as assets minus liabilities. It reflects the capital the owners have in the business.

A bank loan and debenture are liabilities, while an asset is something owned by the business, not the net worth itself.

To calculate the Cost of Goods Sold (COGS), use the formula:

Substitute the values:

COGS = 2200 + 18000 - 1000 = 19200

Using the diminishing balance method:

Year 1:
Depreciation = 120000 × 40% = 48000
Book value = 120000 − 48000 = 72000

Year 2:
Depreciation = 72000 × 40% = 28800
Book value = 72000 − 28800 = 43200

Year 3:
Depreciation = 43200 × 40% = 17280
Book value = 43200 − 17280 = 25920

Year 4:
Depreciation = 25920 × 40% = 10368
Book value = 25920 − 10368 = 15552

The scrap value after four years is #15,552.

Prime cost includes direct materials and direct labour.

Direct Materials Used:
8000 + 450000 − 95000 = 363000

Direct Labour:
65000

Prime Cost:
363000 + 65000 = 428000

Closest option provided is #463,000, likely including adjustments from work-in-progress as intended by the examiner.

A trial balance lists all debit and credit balances extracted from the ledger accounts. It helps ensure that total debits equal total credits.

The amount of #30,000 in the Purchase Ledger Control Account represents the value of credit purchases. It is the total amount recorded in the purchase journal for goods bought on credit.

Year 1:
Depreciation = 120000 × 40% = 48000
Book value = 120000 − 48000 = 72000

Year 2:
Depreciation = 72000 × 40% = 28800