JAMB and WAEC Accounts (Principles of Accounts) questions: Company accounts

33 questions with answers and explanations. Tap an option to check yourself.

1. Question 1· Company accounts· WAEC

   Shares that carry a fixed rate of dividend paid before ordinary dividends are

   • Abonus shares
   • Bordinary shares
   • Cdebentures
   • Dpreference shares

   Show answer

   Explanation and discussion

2. Question 2· Company accounts· WAEC

   Shares issued to existing shareholders free of charge out of reserves are

   • Apreference shares
   • Brights issues
   • Cbonus shares
   • Ddebentures

   Show answer

   Explanation and discussion

3. Question 3· Company accounts· WAEC

   100,000 ordinary shares of ₦1 each are issued at ₦1.50 each. Find the share premium.

   • A₦50,000
   • B₦150,000
   • C₦100,000
   • D₦1.50

   Show answer

   Explanation and discussion

4. Question 4· Company accounts· JAMB

   Debenture holders of a company are

   • Aowners entitled to vote
   • Bmembers sharing residual profit
   • Ccreditors entitled to fixed interest
   • Ddirectors of the company

   Show answer

   Explanation and discussion

5. Question 5· Company accounts· WAEC

   Share premium arises when shares are issued

   • Afree to directors
   • Bat their nominal value
   • Cbelow their nominal value
   • Dabove their nominal value

   Show answer

   Explanation and discussion

6. Question 6· Company accounts· JAMB

   Interim dividends are

   • Ainterest on debentures
   • Bpaid after liquidation
   • Cpaid during the financial year before final results
   • Dpaid only to directors

   Show answer

   Explanation and discussion

7. Question 7· Company accounts· JAMB

   Shares issued below their nominal value are issued at a

   • Abonus
   • Bpremium
   • Cpar
   • Ddiscount

   Show answer

   Explanation and discussion

8. Question 8· Company accounts· WAEC

   Preference shareholders receive

   • Ainterest on loans
   • Bvariable dividends
   • Cdividends at a fixed rate before ordinary shareholders
   • Dno dividend

   Show answer

   Explanation and discussion

9. Question 9· Company accounts· JAMB

   A company has 400,000 ordinary shares of ₦2 each, fully paid, and declares a dividend of 10%. The total dividend is

   • A₦800,000
   • B₦40,000
   • C₦80,000
   • D₦8,000

   Show answer

   Explanation and discussion

10. Question 10· Company accounts· JAMB

    The maximum amount of share capital a company may issue according to its memorandum is the

    • Aissued capital
    • Bauthorised capital
    • Ccalled-up capital
    • Dpaid-up capital

    Show answer

    Explanation and discussion

11. Question 11· Company accounts· JAMB

    Capital reserves such as share premium

    • Acannot normally be distributed as cash dividends
    • Bare paid as dividends
    • Care liabilities
    • Dare expenses

    Show answer

    Explanation and discussion

12. Question 12· Company accounts· WAEC

    Authorised share capital is

    • Athe shares fully paid
    • Bthe shares already issued
    • Cthe maximum share capital a company may issue
    • Dthe debentures

    Show answer

    Explanation and discussion

13. Question 13· Company accounts· JAMB

    A general reserve is created by

    • Aissuing shares
    • Btransferring part of the profit to it
    • Cborrowing
    • Dselling assets

    Show answer

    Explanation and discussion

14. Question 14· Company accounts· JAMB

    A company issued 600,000 ordinary shares of ₦1 each at ₦1.50 per share. The share premium is

    • A₦600,000
    • B₦900,000
    • C₦300,000
    • D₦150,000

    Show answer

    Explanation and discussion

15. Question 15· Company accounts· WAEC

    Ordinary shares carry

    • Afirst claim when the company is wound up
    • Ba fixed rate of interest
    • Cno rights at all
    • Dvoting rights and variable dividends

    Show answer

    Explanation and discussion

16. Question 16· Company accounts· WAEC

    The amount of share capital a company is permitted to issue was traditionally called

    • Acalled-up capital
    • Bauthorised capital
    • Cpaid-up capital
    • Dworking capital

    Show answer

    Explanation and discussion

17. Question 17· Company accounts· JAMB

    Interest on debentures is

    • Aan appropriation of profit
    • Ban expense charged before profit is appropriated
    • Ca dividend
    • Dcapital

    Show answer

    Explanation and discussion

18. Question 18· Company accounts· JAMB

    A company declares a 10% dividend on 500,000 ordinary shares of ₦2 each. Find the total dividend.

    • A₦200,000
    • B₦50,000
    • C₦100,000
    • D₦1,000,000

    Show answer

    Explanation and discussion

19. Question 19· Company accounts· JAMB

    Preference shareholders differ from ordinary shareholders because preference shareholders

    • Ahold debentures
    • Bhave more votes
    • Care creditors of the company
    • Dreceive a fixed rate of dividend before ordinary shareholders

    Show answer

    Explanation and discussion

20. Question 20· Company accounts· WAEC

    A company issued 50,000 ordinary shares of 50 kobo each at 80 kobo. The share premium account is credited with

    • A₦10,000
    • B₦25,000
    • C₦40,000
    • D₦15,000

    Show answer

    Explanation and discussion