If you are preparing for an accounting aptitude test or even a job interview, these accounting questions and answers will help you master the principles of accounting. This test covers accounting past questions from WAEC, JAMB, Post UTME exams and many more.
N6,120,000
N8,280,000
N6,120,300
N8,820,000
Correct answer is A
What is 'Net Debt'?. Net debt shows a business's overall financial situation by subtracting the total value of its cash, cash equivalents, and other liquid assets, a process called netting. All the information necessary to determine a company's net debt can be found on its balance sheet.
A bad debt is a monetary amount owed to a creditor that is unlikely to be paid and, or which the creditor is not willing to take action to collect for various reasons, often due to the debtor not having the money to pay, for example due to a company going into liquidation or insolvency.
net debtors = 7,200,000 (after all necessary deductions have been made)
bad debts = 15% ( an amount to be deducted from the total of all the debts owed to the company)
The question says, ''the total balance of debtors before adjustment'' Remember net debtors is gotten after necessary deductions are made. This means that, the 15% provided as bad debts to be written off by the company, had already been deducted as well. to get the initial balance before the deductions, we simply get 15% of 7,200,000 and add it to the net debtors. Hence we have;
15/100 * 7,200,000 = N1,080,000
7,200,000 + 1,080,000 = N8,280,000
The accumulated fund of a non-trading concern can equally be referred to as?
Members equity
Share capital
General fund
Surplus fund
Correct answer is C
n accumulated fund is the capital fund of a nonprofit organization. Money is directed into the accumulated fund when revenues are greater than expenditures and there is a budgetary surplus. Capital fund (also known as general fund and accumulated fund) is a balance sheet item which represents the surplus of assets over liabilities of a non-trading concerns. In other words, we can say that the capital fund of non-profit organizations is equivalent to the capital of for-profit organizations. It increases as a result of surplus and decreases as a result of deficit computed by preparing an income and expenditure account.
The partnership deed normally specifies?
How profits or losses are to be shared
The capital to be contributed annually
How salaries are paid to employees
The profit that should be earned annually
Correct answer is A
A partnership deed is a document containing an agreement that details the rights and obligations of each partner participating in a venture. For example, a deed of partnership could specify how proceeds from the partnership's business are to be divided among the partners.
In order to make the cash book balance equal to the bank statement, it is usually to add?
Uncredited cheques
Direct payments by bank
Bank charged
Unprecedented cheques
Correct answer is D
we will look at the way in which a business deals with any differences between the balance of the bank account in the cash book and the closing balance of the bank account shown by the bank statement for the same period.
These differences are explained by a document known as a bank reconciliation statement: which lists
• items which are in the cash book but not on the bank statement
• items which are on the bank statement but not in the cash book
This process is an important one: it enables the business to update its cash book and also helps to prove the accuracy of the bookkeeping of the business and the bank.
1 Prepare a Bank Reconciliation Statement
(a) Compare transactions that appear on both Cash Book and Bank Statement
(b) Update Cash Book from details of transactions appearing on Bank Statement
(c) Balance the bank columns of the Cash Book to calculate the revised balance
2 Complete a Bank Reconciliation Statement
(a) Enter correct date of the statement
(b) Enter the balance at bank as per the Cash Book
(c) Enter details of unprecedented cheques
(d) Enter sub-total on reconciliation statement
(e) Enter details of bank lodgements
(f) Calculate balance as per Bank Statement
Conversion
Dissolution
Merger
Absorption
Correct answer is C
A merger is an agreement that unites two existing companies into one new company. There are several types of mergers and also several reasons why companies complete mergers. Mergers and acquisitions are commonly done to expand a company’s reach, expand into new segments, or gain market share. All of these are done to please shareholders and create value.
A merger is the voluntary fusion of two companies on broadly equal terms into one new legal entity. The firms that agree to merge are roughly equal in terms of size, customers, scale of operations, etc. For this reason, the term "merger of equals" is sometimes used. Acquisitions, unlike mergers, or generally not voluntary and involve one company actively purchasing another.
Mergers are most commonly done to gain market share, reduce costs of operations, expand to new territories, unite common products, grow revenues, and increase profits—all of which should benefit the firms' shareholders. After a merger, shares of the new company are distributed to existing shareholders of both original businesses.
Due to a large number of mergers, a mutual fund emerged, giving investors a chance to profit from merger deals. The fund captures the spread or amount left between the offer price and trading price. The Merger Fund from Westchester Capital Funds has been around since 1989. The fund invests in companies that have publicly announced a merger or takeover. To invest in the fund, a minimum amount of $2,000 is required, with a 1.91% expense ratio. As of March 2, 2019, the fund has returned 6.1% annually since inception in 1989.