All 49 questions from the Joint Admissions and Matriculation Board (JAMB) Accounting 2011 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The historical development of accounting reveals that it
The need to keep account arises where there is development in finances among people, so accounting is a product of financial development.
In a trial balance, income and liabilities are
All income and liabilities appear on the credit side of a trial balance, while assets and expenses appear on the debit side.
The principle of double entry system ensures
The double entry principle ensures that the ledger produces the same debit and credit totals, thereby checking the mathematical accuracy of posting.
I. Deduct the smaller side figure from the bigger side figure II. Add up both sides III. Take the difference to the smaller side and add to the smaller figure. The correct procedure for balancing an account is
The correct procedure for balancing an account is: II (add up both sides), I (deduct the smaller side from the bigger), III (take the difference to the smaller side).
Given: Lighting expenses #400, Purchases #3,000, Sales #1,200, Creditors #2,250, Debtors #50. Calculate the total of the trial balance.
Debit side: Lighting expenses 400 + Purchases 3,000 + Debtors 50 = 3,450. Credit side: Sales 1,200 + Creditors 2,250 = 3,450. Total of the trial balance = #3,450.
The major feature of a journal is that it has
A journal typically has five columns: date, particulars, folio, debit and credit.
The medium of correcting errors whose differences are shown in the trial balance is by the use of
A suspense account is the account used to record an error temporarily until the mistake is discovered and corrected.
Adamu Stores bought accessories from Mu'azu beverages for #400 on credit. A trade discount of 10% and a cash discount of 15% were provided. Find the total amount paid.
Trade discount = 10% x #400 = #40. Cash discount = 15% x #400 = #60. Amount paid = #400 - (#40+#60) = #300.
[Same information as above] Calculate the cash discount.
Cash discount = 15% x #400 = #60.
In bank reconciliation process, discrepancies caused by timing arises as a result of
Timing differences (such as unpresented and uncredited cheques) arise from differences between the cash book and the bank statement.
The process of reconciling cheques between banks is termed cheque
The process of reconciling cheques between banks is termed cheque clearing.
In a bank reconciliation statement, interest charged for overdrawn balances should be added to the
Interest charged for overdrawn balances has already been deducted in the cash book but not yet reflected in the bank statement; to reconcile, it is added to the balance as per bank statement.
[Given items: I. Stock of goods II. Furniture III. Creditors IV. Loan from the bank V. Bank overdraft (item list partially unclear in source scan)] Determine the current liabilities.
Per the source answer key, the current liabilities identified are Furniture and Creditors (II and III); Creditors and bank loan/overdraft are typically settled within a year and classed as current liabilities. (Note: the item list in the source scan was not fully legible - this answer follows the official key letter given.)
[Same information as above] Find the current assets.
The current assets are stock of goods and cash at bank (I and V).
The type of expense charged against administration of a firm is the
The administrative department is the department that handles loans and similar matters; thus, interest paid on loan is charged against the administrative department of a firm.
In a period of declining price, which of the following methods would result in higher profit?
In a period of declining prices, LIFO (Last In First Out) values cost of goods sold using the most recent (lower) prices, leaving older (higher-cost) stock in inventory, which results in a higher reported profit.
The item on the credit side of the trading account is the
Sales appear on the credit side of the trading account.
[Stock movement: June 30 Closing stock 100 units at #90; July 8 Purchased 200 units at #95; 10 Sold 160 units; 17 Returned 80 faulty units purchased at #95; 18 Purchased 200 units at #105; 20 Sold 180 units; 28 Purchased 200 units at #110; 29 Sold 120 units; 30 Sold 100 units] How many units were at hand as at July 30?
Units at hand by July 30 = 100+200-160-80+200-180+200-120-100 = 60 units.
[Same stock movement as above] What is the value of stock as at the end of July 10 using FIFO?
Value of closing stock = 140 units x #95 = #13,300 (using FIFO, remaining units are valued at the most recent purchase prices).
A typical example of a real account is
A real account records the tangible assets of a business - plant is a typical example of a real account.
The control account can be used in
A control account is used to minimize fraud and check for accuracy - it monitors the books of original entry.
[Incomplete Record extract: Sales #10,600; Rent #200; Depreciation of vehicle (cost #5,000) 10%; Gross profit margin is 20%] What is the cost of goods sold?
Gross profit = 20/100 x #10,600 = #2,120. Cost of goods sold = Sales - Gross profit = #10,600 - #2,120 = #8,480.
[Same information as above] Calculate the net profit.
Gross profit = #2,120. Expenses: Rent #200 + Depreciation on vehicle (10% x #5,000 = #500) = #700. Net profit = #2,120 - #700 = #1,420.
[Trading account for the year ended 31st December 2009: Opening stock 32,000; Purchases 40,000; Carriage inward 1,000; total 41,000; Less returns 2,000; = 39,000; Less closing stock 9,000; Sales 48,800; Less returns 2,000] Find the average stock for the period.
Average stock = (Opening stock + Closing stock)/2 = (#32,000+#9,000)/2 = #41,000/2 = #20,500.
[Same information as above] Calculate the cost of goods sold.
Cost of goods available = #32,000+#39,000 = #71,000. Cost of goods sold = #71,000 - closing stock #9,000 = #62,000.
The cost that are directly traceable to the goods being produced is
Prime cost is the cost of all direct expenses traceable to the goods being produced.
The production cost that does not form part of the product but is incidental to production and facilitates the production activities is the
Indirect costs (factory overheads) are not directly traced to the produced goods but have an impact on, and facilitate, the production of the goods.
Work-in-progress is the
Work-in-progress refers to goods which have been processed but not yet finished for consumption, i.e. the value of partly finished goods.
The major feature of not-for-profit-making organization is that they are formed
A not-for-profit organization is set up to improve the welfare of its members.
The subscription paid in advance is treated in the balance sheet of a club as
When an income is paid in advance, such as subscription in advance, it is treated as a liability, similar to rental prepayments.
The capital of not-for-profit-making organization is referred to as
Accumulated fund is the equivalent of capital for a non-profit organization.
The major objective of departmental accounts is to ascertain the
A departmental account is adopted to monitor the progress and contribution of each department to the organization as a whole, particularly its contribution to profit.
The transactions relating to liquidation in partnership account is drawn by using
The realization account is the account needed for liquidating a partnership business.
The cost method of charging goods to branch is used where
If goods are perishable, it is best that the branch determines the price to avoid wastage, so the cost method (rather than a fixed invoice price) is used.
The correct entries to record goods transferred to branch from head office is to debit
When goods are sent to the branch by head office, the accounting entry is: Debit Branch stock account, Credit Goods sent to branch account.
The two accounts that are normally opened in the head office when goods are transferred to a branch are
The two accounts normally opened in the head office are the branch stock account and the goods sent to branch account.
Goods invoiced to a branch can be sent using
Goods can be invoiced to a branch using cost price, selling price, or a fixed percentage added to cost price.
The major point of agreement carried by the partnership deed is
The ratio for sharing profit and loss is the major agreement of any partnership business, as set out in the partnership deed.
Keme and Kemi are in partnership sharing profit and losses in the ratio 3:2. Capital: Keme #20,000, Kemi #10,000. Drawings: Keme #2,000, Kemi #3,000. Profit #6,000. Interest on capital 5%. Interest on drawings 10%. The interest on Kemi's capital is
Interest on Kemi's capital = 5% x #10,000 = #500.
[Same partnership information as above] The interest on Keme's drawings is calculated as
Per the source answer key, interest on Keme's drawings is calculated as #100 (note: applying 10% to Keme's #2,000 drawings would give #200; the source's worked calculation shows a lower rate applied, resulting in the stated answer of #100).
Which of the following can be used on admission of a new partnership?
When a new partner is admitted, the old partners revalue the assets through a revaluation account.
Goodwill is determined using
Goodwill is determined using the business and customer relations built up by the firm.
The founders of a company are
Those that come together to register a company are usually referred to as the promoters of the company.
The fund in which all government receipts are paid is
The Consolidated Revenue Fund (CRF) is the account used to record all the receipts and payments of the government.
Which of the following accounts for the highest revenue to Nigeria?
Petroleum resources (oil revenue) account for the highest share of government revenue in Nigeria. (Note: the official answer key text for this specific item was not legible in the source scan; this answer follows standard economics/accounting reference knowledge of Nigeria's revenue structure.)
If Aboki Holdings Limited issued 120,000 ordinary shares of #2.00 each at market value of #5.50 each, the share premium would be
Share premium = (#5.50 - #2.00) x 120,000 = #3.50 x 120,000 = #420,000.
Which of the following is a signatory to federal government account?
The Accountant-General for the Federation is one of the signatories to the federal government accounts.
The chief accounting officer of a local government is the
The executive chairman of a local government is also the chief accounting officer of the local government.
Which of the following signs general warrant for the release of money from the consolidated revenue fund?
The Minister of Finance is charged with the duty to sign the general warrant for the release of funds from the Consolidated Revenue Fund (CRF).
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