JUPEB-Accounts2015
JUPEB-Accounts2015
2015 EXAMINATIONS
ACCOUNTING
ESSAY QUESTIONS
Attempt Four Questions, at least, ONE question from each section
Question 1
A. i. What is a Source Document? (1 Marks)
ii. List and briefly explain five major source documents that can be found in a typical
sole proprietorship business Nigeria. (4 Marks)
B. List four major conditions under which bad debts can be written off. (4 Marks)
C. Mention the main attributes of a non-current (fixed) asset. (2 Marks)
D. With clear examples, define the following terms:
i. Accounting Concept;
ii. Accounting Basis;
iii. Accounting Policy; and
iv. Bookkeeping. (4 Marks)
(Total: 15 Marks)
Question 2
The following are balances extracted from the books of Muda Manufacturing Company Ltd as at
31st December, 2013:
N
Delivery van expenses 125,000
Electricity: Factory 142,950
Office 55,500
Manufacturing wages 2,273,500
General expenses: Factory 282,000
Office 190,800
Sales representative: Commission 393,000
Purchase of raw materials 1,952,700
Rent: Factory 240,000
Office 110,000
Machinery (cost N2,500,000) 1,625,000
Office equipment (cost N750,000) 550,000
Office salaries 742,250
Debtors 1,418,500
Creditors 972,500
Bank 666,850
Sales 6,825,800
Premises (cost N2,500,000) 2,000,000
Stock at 31 December, 2009:
Raw materials 428,250
Finished goods 1,474,000
Share capital 6,872,800
Required:
(a) Determine the contribution per unit of the product (3Marks)
(b) Using your answer in (a) determine how many units the company must sell in order to break
even (3 Marks)
(c) Calculate the additional sales in units required to maintain the current profit level, if the selling
price is reduced by 5 percent. (3 Marks)
(d) Calculate the net profit if the sales volume (in units) is increased by 10 percent.(3 Marks)
(e) If the fixed cost increases by N20,000, how many units should be sold in order to earn a profit
of N60,000? (3 Marks)
Total (15 Marks)
Question 4
Naira and Kobo Limitedmakesandsellsasingleproduct.Thefollowingdatarelatetotheyear2011.
Production2200units
Sales2000 units N
Variablemanufacturingcost/unit 14.00
Fixedmanufacturingoverhead (total) 4400.00
Variablesellingand administrationoverhead/unit 1.00
Fixedsellingand administrationoverhead 800.00
Sellingpriceperunit 30.00
Preparethecompany’sincomestatementbasedon
(i) Marginalcostingprinciples (6 Marks)
(ii) Absorptioncostingprinciples (6 Marks)
(iii) Comment on the profits (3 Marks)
Question 6
(a) Explain the concept “True and fair view” as it relates to financial reporting.(5 Marks)
(b) Explain FOUR fundamental differences between Internal and External Auditors.
(10 Marks)
Question 8
Mr.Kolelowohasbeentradingforseveralyears. Recently, hedecidedtoceasebusinessas a
result of the economic
downturn.Heactuallyceasedtradingon30thJune,2011.Hedeclaredthefollowingadjustedprofi
ts:
N
Yearended31/12/2011 500,000
Yearended31/12/2012 430,000
Periodto30/06/2013 70,000
Required.
a. ComputetheassessableprofitsofMr.Kolelowofortherelevantyearsofassessment.
(12 Marks)
b. StatebrieflythecessationrulesunderCompaniesIncomeTaxActCAPC21LFN2004.(3
Marks)
JOINT UNIVERSITIES PRELIMINARY EXAMINATIONS BOARD
2015 EXAMINATIONS
3. Chike bought goods on credit from Taiwo for N10,000, less trade discount of 5%. How would
the transaction be recorded in Chike’s books?
A. An error of principle
B. A transposition error when transferring a ledger account balance to the Trial Balance.
C. An error of commission where the wrong account name is used for a transaction but the
posting is wrongly done.
D. An error of original entry.
5. How many types of opinion could an Auditor express in respect of a set of audited financial
statements?
A. 10 possible opinions
B. 6 possible opinions
C. 5 possible opinions
D. 4 possible opinions
6. What are the major assumptions in contribution/sales analysis?
i. Costs can be identified as either fixed or variable
ii Fixed cost per unit is constant as activity rises
iii Variable cost per unit changes with the volume of activity
IV Volume of activity is the only factor that affects revenue and variable costs.
A. i and iv
B. ii and iii
C. iii and iv
D. i and ii
7. The authority entrusted with the power to assess and collect petroleum tax in Nigeria is:
8. A business manufactured 225 units of a product in a month. From the following information,
what is the break-even point in units?
N
Sales income 1,1250
Variable costs 4500
Fixed overheads 4650
A. 41units.
B. 450 units.
C. 155 units.
D. 153 units.
9. A method of dealing with overheads, which involves spreading common costs over cost centres
on the basis of benefit received, is called
A. Overhead allocation.
B. Overhead absorption.
C. Overhead apportionment.
D. Overhead analysis.
11. The following may disqualify an auditor from being re-appointed, EXCEPT
14. The tier of government, vested with the responsibility of collecting tenement rate and slaughter
slab fees, is
15. A quantitative expression of a plan of action, prepared in advance of the period to which it
relates, is called
A. Control.
B. Budgeting.
C Costing.
D. Process costing.
16. If the annual demand of inventory is 19,600 units, the order cost is ₦25 and the cost of keeping
one unit of inventory is ₦8. What is the economic order quantity (EOQ)?
A. 350 units.
B. 330 units.
C. 320 units.
D. 325 units.
18. If the hourly rate is ₦3, the agreed rate of production per hour is 60 units, the actual number of
hours taken is 6 hours and the units produced is 480 units; what is the worker’s pay under the
Rowan Bonus Scheme?
A. ₦22
B. ₦22.5
C. ₦25
D. ₦21
19. The following are advantages of the NPV method in project evaluation, EXCEPT that
21. A sale should be recognised when the goods or services have been provided and the invoice
sent out, rather than when the sale is agreed. Which accounting concept does this illustrate?
A. Realization concept.
B. Consistency concept.
C. Going concern concept.
D. Materiality concept.
22. The account in which each partner’s contribution is recorded and kept is called _____ Account.
A. Current
B. Partnership
C. Capital
D. Contribution account
23. Which of the following is shown in the statement of comprehensive income of a company?
A. Premium on issue of shares.
B. Proceeds from issue of shares.
C. Auditor’s remuneration.
D. Proposed dividend.
24. If the accrued wages of a business, amounting to N1,800, is not recorded, then
A. The profit will be overstated by N1,800 and liability understated by N1,800.
B. The profit will be understated by N1,800 and liabilities understated by N1,800.
C. The two sides of the Trial Balance will differ by N1,800.
D. The profit will be overstated by N1,800 and the cash balance will also be overstated by
N1,800.
25. The responsibilities of the directors in relation to the accounting functions of the company fall
under the following headings, EXCEPT
A. Safe-guarding the company’s assets and preventing errors and fraud in the company.
B. Defining the concepts of materiality and tolerable errors for the auditor.
C. Ensuring that the company keeps proper accounting records, as defined in legislation.
D. Setting up an internal control system in the company.
26. The removal of an auditor before the expiration of his/her term requires a special resolution and a
notice of
A. 14 days.
B. 21 days.
C. 28 days.
D. 30 days.
28. The common name given to Statement of Comprehensive Income and Statement of Financial
Position is
A. Prime accounts.
B. Final accounts.
C. Closing accounts.
D. End-of-the-year account.
29. N50 cash taken from the cash till and banked is posted as follow:
A. Factory cost .
B. Total cost.
C. Prime cost.
D. Selling cost.
31. The bonus to be paid under the Rowan Scheme is determined as follows:
A. Half the time saved, multiplied by the hourly rate.
B. Time taken, divided by time allowed, multiplied by both the time saved and the hourly rate.
C. One third the time saved, multiplied by the hourly rate.
D. Hours worked, multiplied by the hourly rate.
32. An Accountant in public practice can offer all the following services, EXCEPT
33. The scope and nature of an auditor’s contractual obligation to a client is set out in the
A. Management letter.
B. Scope paragraph of the auditor’s report.
C. Engagement letter.
D. Circularisation letter.
A. A body corporate.
B. An officer of the company.
C. A member of a recognised professional accountancy body.
D. A servant of the company.
35. Which Agency of Government is responsible for the taxation of Limited Liability Companies in
Nigeria?
A. Executive Chairman.
B. President.
C. Director.
D. Director-General.
37. The legislations, passed by Acts of National and State Assemblies and Bye-laws by Local Government
authorities in a democratic government, are called
A. Statute laws.
B. Common laws.
C. General laws.
D. Government laws.
38. Ola Enterprises commenced business on 1st March, 2011 and it prepared its accounts to 31st
October each year. The basis period for the determination of the assessable profit for the first tax
year is
39. What is the accounting principle that states “Anticipate no profit but provide for all possible losses”?
A. Accrual concept.
B. Matching concept.
C. Prudence concept.
D. Realisation concept.
40. Which of the following source documents is received from a supplier of goods in relation to
goods returned by a customer?
41. The means of reducing or eliminating variations in accounting practice, in order to introduce a
degree of uniformity into financial reporting, is
A. Accounting standards.
B. Accounting concepts.
C. Accounting manuals.
D. Accounting statements.
42. In a business enterprise that has not kept proper books of accounts, what does an increase in
capital at the end of the year over capital at the beginning of the year represent?
A. Increase in capital.
B. Decrease in capital.
C. Underutilization of resources.
D. Improved operating performance.
A. Mixed cost.
B. Step cost.
C. Variable cost.
D. Fixed cost.
45. When the marginal revenue equals the marginal cost, then the
A. Profit is minimized.
B. Profit is equal to zero.
C. Profit is maximized.
D. Loss is minimized.
47. Which of the following is NOT part of auditors’ duties during stocktaking?
A. Carrying out test count and recording his sample for subsequent check against sheets.
B. Carrying out cut-off tests.
C. Taking note of special items like damaged stocks, obsolete stocks and slow-moving items.
D. Obtaining photocopies of sheets or extract items from rough stock sheets for comparison
with the final stock records.
48 What should an auditor do when he/she discovers a material misstatement? He/She should
A. Disregard the material misstatement.
B. Correct the error before he writes the final audit report.
C Issue an unqualified report.
D. Communicate the misstatement to the appropriate level of management on timely basis and
consider the need to report it to those charged with governance.
50. A quorum is formed at any meeting of the State Internal Revenue Board where there is in
attendance