JAMB Accounting Past Questions & Answers - Page 158

The Consolidated Revenue Fund is an account that is owned and managed by the Federal Government, where all its revenues are paid. 
Remember in account we debit all incomes and credit all expenses. Recurrent expenditures would be credited to the consolidated fund. showing monies that have gone out of the fund.

Recurrent expenditure is expenditure, which does not result in the creation or acquisition of fixed assets (new or second-hand). It consists mainly of expenditure on wages, salaries and supplements, purchases of goods and services .

Capital expenditures are money spent by a business or organization on acquiring or maintaining fixed assets, such as land, buildings, and equipment.

Revenue expenses are incurred when a company purchases products or services necessary for generating revenue in the short term. They include overhead cost, maintenance cost of plants and equiptment.

To calculate the book value per share, you must first calculate the book value, then divide by the number of common shares. Also, since you're working with common shares, you must subtract the preferred shareholder equity from the total equity. Hence we have;

Book Value per Share = (Shareholders' Equity - Preferred Equity) / Total Outstanding Common Shares.

The Provision for Bad and Doubtful Debts will appear in the Balance Sheet. Next year, the actual amount of bad debts will be debited not to the Profit and Loss Account but to the Provision for Bad and Doubtful Debts Account which will then stand reduced.