JAMB Accounting Past Questions & Answers - Page 285

1,423.

When shares issued are paid for, accounting entry required is

A.

Debit bank or cash account and credit share capital and/or premium account

B.

Credit bank or cash account and debit share capital and/or premium account

C.

Debit shares account and credit capital account

D.

Credit shares account and debit capital account

Correct answer is A

No explanation has been provided for this answer.

1,424.

Under which of the following conditions is a partnership dissolved?

A.

Change of partnership's head office

B.

Admission of a new partner

C.

Purchase of a large quantity of fixed asset

D.

Retirement of a manager who is not a partner

Correct answer is B

No explanation has been provided for this answer.

1,425.

Kayode, Akpan and Kachalla are in partnership. Their respective capital accounts had the following balances: N40,000, N50,000 and N70,000.
The partners agree to admit Wamo as a new partner with a one-fifth interest in the partnership capital in exchange for N50,000 cash. Wamo's equity in the resulting partnership is

A.

N32,000

B.

N40,000

C.

N42,000

D.

N50,000

Correct answer is D

Equity is the same as capital. This is funds paid into a business by investors in exchange for common or preferred stock.

50,000 is Wamo's equity contribution.