JAMB Accounting Past Questions & Answers - Page 10

46.

One of the options below have the same features as the profit and loss account in non-profit organization

A.

Non profit account

B.

Profit and loss account

C.

Income and expenditure account

D.

Receipts and payment account

Correct answer is C

The income and expenditure account shows the summary of revenue and running costs of a non-profit making organization. It follows the same principles as the profit and loss account of a trading concern.

47.

Capital for a profit making organization is generated through

A.

Gift

B.

Donation

C.

Shares

D.

Subscription

Correct answer is C

Shares can be issued to the public for subscription. A lot of money can be raised to finance the operation of the business through the issue of new shares to members of the public.

48.

The assumption that a business will continue to exist into the foreseeanle future is recognized by a concept called

A.

Matching

B.

Business entity

C.

Going concern

D.

Historical cost

Correct answer is C

The going concern concept states that a business will continue to operate for an indefinte period of time or perpectual existence.

49.

Shares are said to be authorized when they are

A.

Paid-up

B.

Called up

C.

Offered for sale

D.

Subscribed

Correct answer is C

Authorized shares are defined as the maximum number of shares that a company is legally allowed to issue to investors as per its own determinations

50.

Salaries in arrears is treated in the balance sheet as a

A.

Current asset

B.

Current liability

C.

Long term liability

D.

Fixed asset

Correct answer is B

Salaries in arreas is an unpaid salary with amount due from the past. It is treated as current liabilities in the balance sheet.