The Final Accounts of a Sole Trader - Jamb Accounts - Principles of Accounts Past Questions and Answers

Question 21:

• JAMB 1997

The process of allocating the cost of an intangible assets over its useful life is known as

A. Depreciation
B. Extraction
C. Depletion
D. Amortization

Question 22:

• JAMB 1997

The total of the creditors at the beginning of the year was N4,600 and at the end of the year N5,250. During the year, N26,500 was paid to suppliers and N130 was received in discounts from these suppliers. The purchases for the year would be

A. N26,630
B. N27,038
C. N27,150
D. N27,280

Question 23:

• JAMB 1997

Given:
Capital at the beginning...............N20 000
Drawings...............................N3 000
Capital................................N30 000
New capital introduced.................N8 000
What is the profit for the period?

A. N4 000
B. N5 000
C. N6 000
D. N8 000

Question 24:

• JAMB 1998

Sobande Incorporation acquired a machine that involved the following expenditures and related factors.
N
Gross invoice price 15,000
Sales tax 900
Purchases discount taken 300
Freight 750
Assembly of machine 500
Installation of machine 800
Assorted spare parts for future use 1200
Turing and adjusting machine 700
What is the initial accounting cost of the machine?

A. N19,550
B. N18,950
C. N18,350
D. N17,500

Question 25:

• JAMB 1998

On Ist January, 1993, lobo Company purchased equipment for N18,000. it uses straight-line depreciation with an estimates eight-year useful life and a N2,000 salvage value. On 31st December, 1996, it sells the equipment for N8000. In recording this sales, it should reflect?

A. N10,000 loss
B. N2,000 loss
C. N6,000 gain
D. N8,000 gain