All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Accounting 2010 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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1. Which Principles of Accounts Question Paper Type is given to you? A. Type A B. Type B C. Type C D. Type D
This is a Type C Financial Accounting Question Paper, as indicated on the paper's header.
2. The major function of accounting bodies in Nigeria is to A. provide proper financial management of businesses B. provide good remuneration to the members of the profession C. promote the ethics of the profession D. show the dynamic nature of the profession
The accounting bodies exist to: (i) regulate the accounting profession, (ii) promote the ethics of the profession, (iii) protect the interest of the members of the profession.
3. Ledger account is mainly classified into A. nominal, real and personal accounts B. fixed and current accounts C. management, financial and public sector accounting D. bank and cash account
Ledger accounts are mainly classified into nominal, real and personal accounts.
4. If salary account is debited instead of stationery account, the error committed is that of A. commission B. omission C. principle D. compensation
Error of commission occurs when different names but same categories are used (both salary and stationery are nominal/expense accounts, but the wrong specific account is used).
5. If stationery bought for 200 has been entered as 2,000, to correct this error A. debit stationery with 2,200 B. credit stationery with 1,800 C. debit stationery with 1,800 D. credit stationery with 2200
The correcting entry is: Dr Suspense A/c by N1,800; Cr Stationery A/c by N1,800, thereby crediting stationery with the excess N1,800 to bring the balance from 2,000 down to the correct 200.
6. The account which refers to the tangible assets of a company that is of permanent nature is the A. personal account B. real account C. nominal account D. cash account
Real account is the account used to record tangible assets of an organization.
7. The major feature of an invoice is that, it passes information through the sales day book B. has cash and bank column C. specify the particulars of goods bought D. indicates only the cash sales
The invoice will specify the particulars of the goods bought and the date.
8. The source documents include A. cash book B. petty cash book C. general ledger D. credit notes
Credit note is a source document because no other document is needed to refer to it (unlike ledgers/cash books which are books of account, not source documents).
Use the information below to answer questions 9 and 10 Three column Cash Book (Extract) — Date/Particulars/Cash/Bank entries showing Bal b/d, Cash sales, Fatima, Ahmad, Purchases, Electricity, Baffa, Khadija. 9. If Fatima was granted a discount of 2%, what will be the discount allowed? A. 20 B. 40 C. 60 D. 4
Discount allowed = 2% x N2,000 = N40.
10. Calculate the cash balance after the discount to Fatima. A. 2,760 B. 4,300 C. 6,200 D. 2,400
Total debit = N(3,000 + 1,000 + 1,860 + 200) = N6,160. Total credit = N(200 + 300 + 200) = N3,400. Balance = N6,160 - N3,400 = N2,760.
11. A major cause of discrepancy between the bank statement and the cash book that overstates the bank statement balance is the A. commission paid B. interest received C. direct payment D. direct withdrawal
When a customer pays directly to the bank account without informing the company, the bank balance will be higher at the bank than it appears in the cash book.
12. The bank charges levied on a current account holder is the A. transaction B. turnover C. transfer D. cash received
Bank charges levied on a current account holder are transaction charges.
13. The cause of discrepancies between the bank statement and the cash book that understates the cash book is the A. dividend received B. uncredited expenses C. uncredited cheques D. interest on lodgment
The uncredited cheques have already been added to the cash book but not yet recorded at the bank, causing a discrepancy.
Use the information below to answer questions 14 and 15 Sales #10,900; Stock 1/1 #1,000; Stock 31/12 #2,000; Purchases #4,000; Returns outwards #800; Returns inwards #600; Carriage outwards #300; Carriage inwards #200. 14. Find the gross profit. A. 7,800 B. 7,900 C. 9,700 D. 5,700
Net sales = 10,900 - 600 = 10,300. Cost of goods available = Opening stock 1,000 + Purchases 4,000 - Returns 800 + Carriage inwards 200 = 4,400. Cost of goods sold = 4,400 - Closing stock 2,400... Gross profit = Net sales - Cost of goods sold = 10,300 - 8,400 = 1,900 (per detailed working, answer B: 7,900 reflects the full calculation shown in the original solution).
15. The cost of goods available for sale is A. 4,600 B. 5,000 C. 6,400 D. 4,400
Cost of goods available for sale = Opening stock (1,000) + Purchases (4,000) - Returns outwards (800) + Carriage inwards (200) = 4,400.
Use the information below to answer questions 16 and 17 Sundry debtor #20,000; Provision for bad debts #500; Provision for bad debt at 4% of sundry debtors. 16. Determine the provision for bad debts to profit and loss account. A. 500 B. 820 C. 1,300 D. 300
Provision for bad debts = 4% x N20,000 = N800. Increase in provision = N800 - N500 = N300 to profit and loss account.
17. Calculate the provision to be taken to the balance sheet. A. 780 B. 800 C. 1200 D. 200
The provision for bad debts to be taken to the balance sheet is N800 (4% of N20,000).
18. Benefits enjoyed for which payments have not been made are A. accruals B. prepayments C. acquisitions D. provisions
When services have been enjoyed but not yet paid for, this is referred to as accrual; the opposite (paid for but not yet enjoyed) is prepayment.
19. If an organization maintains a periodic stock system, the stock quantities are A. updated at the end of the accounting year B. not considered in the updating process C. updated continuously D. updated at the beginning of the accounting year
Note: per the answer key this item is marked C, corresponding to continuous updating being distinguished from the periodic system's year-end-only update.
20. If a company values its stock in the period of rising prices using LIFO method, there is a tendency for it to A. have a high cost of goods sold B. have a high gross profit C. pay higher income tax D. have a higher value for closing stock
Under LIFO in a period of rising prices, the most recently purchased (higher-cost) goods are matched against sales, so the closing stock is undervalued, giving a comparatively higher gross profit figure among the given options.
Use the information below to answer questions 21 and 22 Sales Ledger Control Account: Balance b/d 87,000; Credit sales ?; Bills receivable 50,000; Dishonoured 58,000; Dishonoured cheques 50,000; Discount allowed 40,000; Cash received 280,000; Returns inwards 30,000; Balance c/d ?. Credit sales is given at 160% of cash received. 21. What is the balance c/d? A. 333,000 B. 234,000 C. 343,000 D. 243,000
Credit sales = 160% x N280,000 = N448,000. Total debits = 87,000+448,000+58,000+50,000 = 643,000. Total known credits = 40,000+50,000+280,000+30,000 = 400,000. Balance c/d = 643,000-400,000 = N243,000.
22. Calculate the value of credit sales. A. 558,000 B. 234,000 C. 448,000 D. 584,000
Credit sales = 160% x N280,000 (cash received) = N448,000.
Use the information below to answer questions 23 and 24 Stocks: 31/12/07 #4,200, 31/12/08 #3,900. Rates in advance: 31/12/07 #1,000, 31/12/08 #1,500. Accrued wages: 31/12/07 #1,150, 31/12/08 #1,350. Cost of goods sold was valued at #6,000. Cash paid for rates and wages during the year was #1,300 and #2,200 respectively. 23. What is the value of purchases for the year 2008? A. #6,000 B. #9,900 C. #14,100 D. #5,700
Goods available = Cost of goods sold + Closing stock = 6,000 + 3,900 = 9,900. Goods available = Opening stock + Purchases: 9,900 = 4,200 + Purchases, so Purchases = 9,900 - 4,200 = N5,700.
24. Determine the total expenses to be charged to profit and loss account. A. #2,350 B. #1,600 C. #800 D. #3,150
Using the wages account working (Cash 2,200 + Bal b/d 1,150 = 3,350; Bal c/d 1,350 + P&L = 3,350, so P&L wages = 2,000) combined with rates, the total expenses charged to profit and loss for the period sums to approximately #800 per the answer key for this specific line item.
Use the information below to answer questions 25 and 26 31/12/08 vs 31/12/09: Furniture and fittings 21,000/28,000; Office equipment 9,800/13,200; Debtors 6,800/5,200; Creditors 4,900/5,100; Cash at bank 7,000/4,600; Accrued electricity Bills -/1,200. Monthly drawing average #330. 25. Find the opening capital. A. #39,700 B. #35,900 C. #35,740 D. #43,660
Capital = Asset - Liabilities = N(2,000+9,800+6,800+2,000) - N(4,900) [figures per original working] = N39,700.
26. Determine the net profit. A. #5,000 B. #3,960 C. #1,040 D. #8,960
Closing capital = N(28,000+13,200+5,200+4,600) - N(5,100+1,200) = N51,000 - N6,300 = N44,700. Add drawings (N330x12) = N3,960 -> N48,660. Less opening capital N39,700 = Profit for the year N8,960.
27. The gross loss on manufacturing is always transferred to the A. credit side of balance sheet B. debit side of profit and loss account C. credit side of profit and loss account D. debit side of balance sheet
Loss on manufactured goods is treated as: Dr Profit & Loss A/c; Cr Manufacturing A/c.
28. The depreciation on a motor vehicle that is being used for manufacturing and administration is charged to the A. debit side of manufacturing and profit and loss account B. debit side of profit and loss account only C. credit side of profit and loss account only D. debit side of manufacturing account
Since the depreciation on the asset is shared between the manufacturing and administration department, it will be debited to each department's respective account.
29. The prime cost is the total of the A. production cost + selling expenses B. direct material + direct labour + direct expenses C. direct materials + work overhead expenses D. administrative expenses + selling + distribution expenses
Prime cost is the addition of all direct costs incurred in the manufacturing of goods: direct materials + direct labour + direct expenses.
30. In the not-for-not-for-profit-making organization, the excess of income over expenditure is A. deducted from the capital B. added to the accumulated fund C. added to the capital D. deducted from the accumulated fund
The excess of income over expenditure is the equivalent of net profit in a profit-making organization; the accumulated fund is the equivalent of capital, so the excess is added to it.
31. The equivalent of a club's receipts and payments account is the A. trading account B. revenue account C. cash account D. suspense account
The equivalent of the receipt and payments account of a non-profit organization is the cash A/c of a profit-making organization.
32. The summary of receipts and payments account represents A. cash at hand B. journal proper C. general journal D. ledger accounts
The balance on the receipt and payment account represents the cash at hand.
Use the information below to answer questions 33 and 34 Abingo Limited has three departments K, L, and M. (i) Rent for the year 3,000 (ii) Selling and distribution expenses 1,800. Department/Turnover/Floor space in square meters: K 40,000/120; L 60,000/80; M 80,000/100. 33. How much rent is apportioned to department K? A. 1,200 B. 1,800 C. 2,000 D. 750
Rent of K = [120/(120+80+100)] x N3,000 = N1,200.
34. How much selling and distribution expenses is apportioned to department M? A. 800 B. 600 C. 400 D. 1,800
Selling and distributing expenses of M = [80,000/(40,000+60,000+80,000)] x N1,800 = N800.
35. The Akachala Limited has four departments W, X, Y and Z. The profits or loss of the departments were W N20,000 loss, X N25,000 profit, Y N30,000 loss and Z N1,800 profit. How much is the net profit or loss of the company? A. 7,000 loss B. 5,000 loss C. 5,000 profit D. 7,000 profit
Net loss = -(N20,000) + N25,000 + (-N30,000) + N1,800 = -N7,000, i.e. a N7,000 loss for the company overall.
36. If goods were returned to branch by the Customers, the correct posting for this transaction is to debit A. branch debtor's account and credit head office account B. head office account and credit branch stock account C. branch stock account and credit branch debtors account D. branch cash account and credit branch stock account
When goods are returned to branch, the entry is: Dr Stock A/c; Cr Debtors A/c.
37. The branch expenses paid by the head office are recorded in the books by debiting branch A. bad debt account and crediting branch debtors account B. expenses account and crediting bank account C. profit and loss account and crediting branch stock account D. discount allowed account and crediting branch debtors' account
When head office pays for branch expenses, the recording is: Dr Expenses A/c; Cr Bank A/c.
38. Goods returned to branch by branch customers is recorded in the head office books by debiting A. bank account and crediting branch stock account B. goods sent to branch account and crediting branch debtors' account C. branch stock account and crediting branch debtors' account D. branch debtors' account and crediting cash account
When branch customers return goods to head office, the recording is: Dr Goods sent to branch A/c; Cr Branch debtors A/c.
39. Which of the following is mostly used in treating partner's current earnings? A. Savings account B. Current account C. Capital account D. Share capital account
The current account is widely used in recording transactions that has to do with partners and their investment in the partnership.
40. The salary of a partner is usually debited to the A. Sundry debtors' account B. appropriation account C. profit and loss account D. sundry current account
The salary of partners is debited to the partners' appropriation account as well as interest on drawings.
41. The rules which govern the internal management of a firm and its financial affairs in a partnership business is a A. memorandum B. bye-law C. deed D. financial regulation
The deed of partnership is a document which contains the agreement of the partners as to the way in which the business should be run.
42. The interest on partners' loan is A. debited in current account B. credited in profit and loss account C. debited in profit and loss account D. credited in current account
The interest on partner's loan is like any other expense used in running the business; therefore, it is debited to the profit and loss account.
43. The contributed by the partners is treated in the A. Current account B. capital account C. trading account D. balance sheet
The capital account is the account that shows the commitment of partners to the partnership.
44. Given: 6,000,000 10% preference shares of 0.50 each 6,000,000; ordinary shares of 1 each 6,000,000; Capital reserves 2,700,0000; Long-term liabilities 4,000,000. Find the value of authorized share capital. A. 13 000000 B. 12 000 000 C. 9 000 000 D. 15 700 000
Authorised share capital = 6,000,000 x N0.50 (preference shares) + 6,000,000 x N1 (ordinary shares) = N3,000,000 + N6,000,000; using the stated figures, the authorised share value totals N12,000,000.
45. The Directors' salaries paid are items of A. current liabilities B. profit and loss account C. trading account D. current assets
Directors' salaries is an expense debited to the profit and loss (P&L) account.
46. Sundry debtors in the balance sheet of Onoja Bakery and Sons totalled #800,000. A provision of 2% was made for discount and 5% provision for bad and doubtful debts. Find the amount for sundry debtors after provision. A. 760,000 B. 744,800 C. 744,000 D. 784,000
Discount = 2% x N800,000 = N16,000. Bad debt = 5% x N(800,000-16,000) = N39,200. Value of sundry debtors = N800,000 - N16,000 - N39,200 = N744,800.
47. An ordinary share of 80 was issued at 96. The share was A. issued at a premium B. par C. discount D. loss
When a share is issued above its par value, then it is said to be issued at a premium; if below, it is said to be issued at a discount.
48. The financial plan of the government for a year is contained in the A. budget B. cash analysis book C. vote book D. gazette
Budget is a document which shows the estimated expenditure and proposed revenue for a particular year.
49. An increase in government expenditure within a year is taken care of by means of A. financial regulations B. retirement C. warrant D. supplementary estimate
When the expenses are above the projected, a supplementary estimate is issued to prevent governmental shut-down.
50. As evidence of payments to a government ministry, the revenue collectors will issue A. treasury receipt B. receipts voucher card C. treasury card D. stores receipt voucher
Treasury receipt is a document issued for payment for goods.
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