Introduction To Accounting Ratios

EVALUATION

Differentiate between margin and mark-up.

READING ASSIGNMENT

Financial Accounting with, Ease by Onatowokan Oluyombo pages 183 – 167

GENERAL EVALUATION QUESTIONS

1. State five features of capital expenditure
   1. State five characteristics of depreciable asset
      1. List five advantages and three disadvantages of the straight line method of calculating depreciation
      1. List ten users of financial accounting information
      1. List six causes of depreciation of fixed assets

WEEKEND ASSIGNMENT

1. If mark-up is 40%, then margin is (a) ¹/₈(b) 45% (c) ¹/₇ (d) ²/₇
2. if margin is 25% and cost of sales is N30,000 then sales revenue is (a)N25,000 (b) N20,000 (c) N35,000 (d) N30,000
3. If margin of a business is 33¹/₃% then its mark-up is (a) 60% (b) 25% (c) 50% (d) ¹/₃
4. If the sales of a business is N8400 and the business mark-up is 33¹/₃% then the cost of sales is (a) N5000 (b) N6300 (c) N7000 (d) N84000
5. If margin is 1/7 then mark-up is (a) ¹/₈ (b) ¹/₉ (c) ¹/₆ (d) 25%

THEORY

1. The sales of a business is N16,000. Its mark-up is ¼. What is its cost of goods sold?
2. If the closing stock of the business in question one above is N2,800, what is the cost of goods available for sale?