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JAMB Accounting 2013 Objective Past Questions

All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Accounting 2013 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.

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Accounting 2013 Objective — Question 1

Which Question Paper Type of Principles of Accounts is given to you?

  • A. Type D
  • B. Type I
  • C. Type B
  • D. Type UCorrect

Explanation

The question paper type is indicated on the question paper.

Accounting 2013 Objective — Question 2

Accounting information seeks to provide

  • A. permanent records for all transactionsCorrect
  • B. analysis of accounts to trade debtors
  • C. audited reports on the accounts of a company
  • D. data about the employees of a company

Explanation

Accounting information will provide a permanent record which all users of accounts can fall back on at any time.

Accounting 2013 Objective — Question 3

When the debit side total of an account exceeds the credit side total while balancing an account, it means that the account has

  • A. been overdrawn
  • B. been understated
  • C. debit balanceCorrect
  • D. credit balance

Explanation

If Dr is greater than Cr, then it is a Dr (debit) balance, and vice versa.

Accounting 2013 Objective — Question 4

Use the information below to answer questions 4 and 5. July 1 - Started business with ₦10,500 July 31 - Paid Agromachinex owing to them ₦6,000 The double entry for July 1 would be

  • A. debit capital and credit cash
  • B. credit cash and debit bank
  • C. debit capital and credit capitalCorrect
  • D. debit purchases and credit cash

Explanation

Dr: Cash/Bank A/c; Cr: Capital A/c. (Note: per the printed answer key the labelled correct option is C.)

Accounting 2013 Objective — Question 5

(Using the same information as Q4) The double entry for July 31 would be

  • A. debit Agromachinex and credit cashCorrect
  • B. debit equipment and credit Agromachinex
  • C. credit capital and debit cash
  • D. credit cash and debit purchases

Explanation

Dr: Creditors A/c (Agromachinex); Cr: Cash A/c.

Accounting 2013 Objective — Question 6

The total credit sales for a period can be extracted from the

  • A. cash book
  • B. sales day bookCorrect
  • C. petty cash book
  • D. returns inwards

Explanation

The sales day book is a source document which records all sales for a day. The total for all days is the organisation's total sales for the period.

Accounting 2013 Objective — Question 7

The major source document which enables an employer to calculate the employee wages is the

  • A. nominal roll of employees
  • B. record of numbers of hours workedCorrect
  • C. effort of the employee
  • D. record of number of dependants per employee

Explanation

The record of number of hours worked lets the employer know the active/machine time of the labour. The wage rate is multiplied by the active hours to obtain the employee's wages.

Accounting 2013 Objective — Question 8

Which of the following items is a capital expenditure?

  • A. Maintenance of office machine
  • B. Purchase of office stationery
  • C. Carriage inwards
  • D. Purchase of office machineryCorrect

Explanation

Purchase of office machinery is a material item and does not occur every year, making it a capital expenditure.

Accounting 2013 Objective — Question 9

The corresponding entry of personal accounts found in the debit side of the cash book is to

  • A. credit real accounts
  • B. debit the ledger
  • C. credit the ledgerCorrect
  • D. debit real accounts

Explanation

Every debit entry in the cash book that relates to a personal account is corresponded by crediting the personal account in the ledger.

Accounting 2013 Objective — Question 10

Alaka who owed Saka ₦15,000, settled his debt after deducting cash discount of 10%. To record the discount in the book of Saka,

  • A. debit discount received account and credit Alaka's account
  • B. debit Alaka's account and credit discount received account
  • C. debit Saka's account and credit discount received account
  • D. debit discount allowed account and credit Alaka's accountCorrect

Explanation

Saka is the creditor to Alaka, and Alaka is a debtor to Saka. Any discount Saka gives Alaka is a discount allowed, treated in Saka's books as: Dr Discount Allowed A/c, Cr Debtors A/c (Alaka).

Accounting 2013 Objective — Question 11

I. The amount of the imprest is the same from one organisation to another. II. At the end of a fixed period, the petty cashier receives a fixed sum of money. III. At the end of a period, the petty cashier is reimbursed with the amount spent in that period. IV. The system is a method by which a measure of control is kept on petty cash expenses. Which of the above is correct about the imprest system?

  • A. I and III
  • B. I, III and IV
  • C. II and IV
  • D. III and IVCorrect

Explanation

Statements III and IV correctly describe the imprest system — the petty cashier is reimbursed the amount spent, and the system is a means of control over petty cash expenses.

Accounting 2013 Objective — Question 12

Use the information below to answer questions 12 and 13. A machine bought for ₦35,000 was estimated to have a life span of 5 years with a scrap value of ₦9,000. The yearly depreciation using the straight line method would be

  • A. ₦8,800
  • B. ₦6,500
  • C. ₦5,200Correct
  • D. ₦4,400

Explanation

Depreciation = (Cost − Residual value) ÷ Life span = (35,000 − 9,000) ÷ 5 = ₦5,200.

Accounting 2013 Objective — Question 13

(Using the same information as Q12) If the scrap value is presently ₦15,000, what will be the yearly depreciation using the straight line method?

  • A. ₦4,000Correct
  • B. ₦7,000
  • C. ₦11,000
  • D. ₦24,000

Explanation

Depreciation = (35,000 − 15,000) ÷ 5 = ₦4,000.

Accounting 2013 Objective — Question 14

The purchase of mattresses from Freehold Enterprises by cheque amounted to ₦305,150. The correct entries for this transaction in the book of the buyer is to debit

  • A. sales account and credit bank account
  • B. purchases account and credit bank accountCorrect
  • C. cash and credit freehold
  • D. bank and credit freehold

Explanation

Dr: Purchases A/c; Cr: Cash/Bank A/c.

Accounting 2013 Objective — Question 15

Use the information below to answer questions 15 and 16. Sales 232,000 Opening stock 28,000 Purchases 128,000 Carriage inwards 4,000 Carriage outwards 6,000 Closing stock 10,000 Discount received 18,000 Expenses 20,000 Calculate the gross profit.

  • A. ₦100,000
  • B. ₦86,000
  • C. ₦82,000Correct
  • D. ₦76,000

Explanation

Sales 232,000; Opening stock 28,000 + Purchases 128,000 + Carriage inwards 4,000 = Goods available 160,000; less Closing stock 10,000 = Cost of sales 150,000. Gross profit = 232,000 − 150,000 = ₦82,000.

Accounting 2013 Objective — Question 16

(Using the same information as Q15) Calculate the expenses debited to the profit and loss account.

  • A. ₦17,000
  • B. ₦23,000
  • C. ₦26,000Correct
  • D. ₦30,000

Explanation

Expenses debited to profit and loss = Carriage outwards 6,000 + Expenses 20,000 = ₦26,000.

Accounting 2013 Objective — Question 17

Given: Opening capital 1,500 Capital introduced 500 Profit for the year 800 Cash drawings 250 Calculate the closing capital.

  • A. ₦2,550Correct
  • B. ₦2,500
  • C. ₦2,350
  • D. ₦2,250

Explanation

Closing capital = Opening capital 1,500 + Capital introduced 500 + Profit 800 − Drawings 250 = ₦2,550.

Accounting 2013 Objective — Question 18

What type of stock valuation method would a vegetable seller adopt in valuing it's product?

  • A. LIFO
  • B. FIFOCorrect
  • C. Simple average
  • D. Weighted average

Explanation

Since vegetables are perishable, it is best to release the earliest stock first, i.e. First In First Out (FIFO) method.

Accounting 2013 Objective — Question 19

The total cash and cheque received from customers in a control account is derived from the

  • A. purchases day book
  • B. cash bookCorrect
  • C. income and expenditure account
  • D. sales journal

Explanation

The cash book will show whether cash or cheque was received, through proper posting in the cash and bank columns of the cash book.

Accounting 2013 Objective — Question 20

Use the information below to answer questions 20 and 21. 1/1/2010 to 31/12/2010 (figures in ₦, as at 1/1/2010 and 31/12/2010) Creditors: 9,000 / 9,800 Rent owing: 3,800 / 2,500 Rates prepaid: 2,000 / 3,500 Motor van: 8,000 / 8,000 Premises: 10,500 / 10,500 Find the opening capital.

  • A. ₦5,700
  • B. ₦7,700Correct
  • C. ₦9,800
  • D. ₦14,900

Explanation

Opening capital = Opening assets − Opening liabilities = ₦(2,000+8,000+10,500) − ₦(9,000+3,800) = ₦20,500 − ₦12,800 = ₦7,700.

Accounting 2013 Objective — Question 21

(Using the same information as Q20) Calculate the value of closing capital.

  • A. ₦8,700
  • B. ₦9,500
  • C. ₦9,700Correct
  • D. ₦10,700

Explanation

Closing capital = Closing assets − Closing liabilities = ₦(3,500+8,000+10,500) − ₦(9,800+2,500) = ₦22,000 − ₦12,300 = ₦9,700.

Accounting 2013 Objective — Question 22

Given: Opening Capital 50,000 Closing Capital 64,000 Drawings 16,000 Determine the net profit.

  • A. ₦2,000
  • B. ₦14,000
  • C. ₦20,000
  • D. ₦30,000Correct

Explanation

Net profit = Closing capital + Drawings − Opening capital = 64,000 + 16,000 − 50,000 = ₦30,000.

Accounting 2013 Objective — Question 23

The estimated profit or loss for a period is calculated by

  • A. closing capital less opening capital add drawingsCorrect
  • B. opening capital less closing capital add drawings
  • C. opening capital less drawings add closing capital
  • D. opening capital add closing capital add drawings

Explanation

Estimated profit/loss = Closing capital − Opening capital + Drawings.

Accounting 2013 Objective — Question 24

Given: Drawings 3,500 Net loss 2,500 Capital 1/1/2007 35,000 Additional capital 10,000 The adjusted capital as at 31/12/2007 is

  • A. ₦35,000
  • B. ₦39,000Correct
  • C. ₦45,000
  • D. ₦46,000

Explanation

Capital 1/1/2007 35,000 + Additional capital 10,000 = 45,000; less Loss 2,500 = 42,500; less Drawings 3,500 = ₦39,000.

Accounting 2013 Objective — Question 25

When goods produced are transferred at cost plus mark-up before sale, the difference between the cost and the transferred price is a

  • A. discount
  • B. sales commission
  • C. manufacturing profitCorrect
  • D. factory reserves

Explanation

The mark-up added when goods are transferred from manufacturing to trading at more than cost is the manufacturing profit.

Accounting 2013 Objective — Question 26

The addition of the prime cost, indirect cost and opening work-in-progress less the closing work-in-progress will result in cost of

  • A. goods available for sale
  • B. goods sold
  • C. goods manufacturedCorrect
  • D. materials put into production

Explanation

Prime cost + indirect (factory) costs + opening work-in-progress − closing work-in-progress = cost of goods manufactured.

Accounting 2013 Objective — Question 27

Use the information below to answer questions 27 and 28. Opening stock of raw materials 75,000 Purchase of raw materials 330,000 Closing stock of raw materials 80,000 Direct wages 30,000 Carriage of raw materials 10,000 Calculate the cost of raw materials used.

  • A. ₦495,000
  • B. ₦415,000
  • C. ₦335,000Correct
  • D. ₦305,000

Explanation

Opening stock 75,000 + Purchases 330,000 + Carriage 10,000 = Raw materials available 415,000; less Closing stock 80,000 = Cost of raw materials used = ₦335,000.

Accounting 2013 Objective — Question 28

(Using the same information as Q27) Determine the prime cost.

  • A. ₦525,000
  • B. ₦515,000
  • C. ₦465,000
  • D. ₦365,000Correct

Explanation

Prime cost = Cost of raw materials used 335,000 + Direct wages 30,000 = ₦365,000.

Accounting 2013 Objective — Question 29

In manufacturing account, the work-in-progress at the end of the year is

  • A. deducted from the cost of goods completed during the yearCorrect
  • B. added to the cost of goods completed during the year
  • C. stated in the profit and account
  • D. stated in the prime cost section

Explanation

Closing work-in-progress is deducted because it is not yet completed, while the opening work-in-progress is added because it relates to goods completed during the year.

Accounting 2013 Objective — Question 30

Which of the following is accounted for in receipts and payments account?

  • A. Subscriptions received in advanceCorrect
  • B. Subscriptions due not yet received
  • C. Accrued expenses on annual dances
  • D. Depreciation

Explanation

Subscriptions received in advance is already actual cash received, so it is treated in the receipts and payments account.

Accounting 2013 Objective — Question 31

Which of the following expenses relates to the profit and loss account of a manufacturing firm?

  • A. Direct materials
  • B. Direct labour
  • C. Administrative overheadCorrect
  • D. Work-in-progress

Explanation

Administrative overheads are period costs charged to the profit and loss account of a manufacturing company, unlike direct materials, direct labour and work-in-progress which relate to the manufacturing account.

Accounting 2013 Objective — Question 32

I. Direct materials II. Direct labour III. Direct expenses IV. Factory Expenses. Prime cost consists of

  • A. I, II and IIICorrect
  • B. I, II and IV
  • C. I, III and IV
  • D. II, III and IV

Explanation

Prime cost consists of direct costs only (direct materials, direct labour and direct expenses), while factory expenses are an indirect cost, also referred to as factory overhead.

Accounting 2013 Objective — Question 33

The amount paid by the new partner on admission as a compensation for the reputation built up by old partners is

  • A. bonus
  • B. commission
  • C. premium
  • D. goodwillCorrect

Explanation

Goodwill is the reputation built by an organisation; if a new partner is admitted, such reputation is paid for.

Accounting 2013 Objective — Question 34

A partnership's internal regulations are set out by

  • A. a deed
  • B. a law
  • C. a constitution
  • D. an articleCorrect

Explanation

The partnership deed is the document that contains the partners' agreement to the partnership business. (Note: per the printed answer key the correct option is labelled D.)

Accounting 2013 Objective — Question 35

In a partnership account, interest on drawings is

  • A. debited to appropriation account
  • B. credited to appropriation accountCorrect
  • C. treated as an expense in profit and loss account
  • D. recorded in the balance sheet as current assets

Explanation

Interest on partners' drawings is income to the organisation, and is thus credited to the appropriation account.

Accounting 2013 Objective — Question 36

When a share valued at 50k is issued at 1.50, it is said to be issued at

  • A. par
  • B. premiumCorrect
  • C. discount
  • D. interest

Explanation

When a share is issued above its par (nominal) value, it is said to be issued at a premium.

Accounting 2013 Objective — Question 37

The purchase consideration that is lower than the net asset implies that, the buyer has gained the advantage of

  • A. net income
  • B. revenue reserve
  • C. capital reserveCorrect
  • D. net loss

Explanation

If purchase consideration is less than the net value of assets acquired, the difference is treated as a capital reserve.

Accounting 2013 Objective — Question 38

When shares are issued at a discount, the entries are to debit

  • A. application and allotment account and credit discount accountCorrect
  • B. discount account and credit application and allotment account
  • C. cash account and credit discount account
  • D. discount account and credit bank account

Explanation

Dr: Application and Allotment A/c; Cr: Discount Account.

Accounting 2013 Objective — Question 39

When there is no basis of apportionment in an organization, the expenses should be apportioned base on

  • A. sales
  • B. purchases
  • C. equalityCorrect
  • D. floor space

Explanation

If there is no clear basis for apportionment, the expenses should simply be shared equally.

Accounting 2013 Objective — Question 40

Use the information below to answer questions 40 and 41. Department | K (₦) | Y (₦) Opening stock | 2,500 | 800 Purchases | 120,000 | 100,000 Sales | 180,000 | 200,000 Salaries | 8,000 | 30,000 Closing stock | 3,000 | 1,500 (Rate expenses of 1,500 are apportioned in the ratio 1:2) The gross profit for K is

  • A. ₦23,500
  • B. ₦60,500Correct
  • C. ₦60,700
  • D. ₦82,500

Explanation

Cost of goods sold for K = Opening stock 2,500 + Purchases 120,000 − Closing stock 3,000 = 119,500. Gross profit = Sales 180,000 − 119,500 = ₦60,500.

Accounting 2013 Objective — Question 41

(Using the same information as Q40) What is the net profit for Y?

  • A. ₦52,000
  • B. ₦68,300
  • C. ₦68,800
  • D. ₦69,700Correct

Explanation

Cost of goods sold for Y = 800 + 100,000 − 1,500 = 99,300. Gross profit = 200,000 − 99,300 = 100,700. Less expenses (Salaries 30,000 + Rate share 1,000) = 31,000. Net profit = 100,700 − 31,000 = ₦69,700.

Accounting 2013 Objective — Question 42

The objective of departmental account is to

  • A. ascertain the cost of running the organisation
  • B. ascertain the amount of profit or loss for each departmentCorrect
  • C. ascertain the amount of profits or losses for the enterprise
  • D. offset the loss of each department

Explanation

The departmental account is prepared with the aim of knowing the performance (profit or loss) of each department.

Accounting 2013 Objective — Question 43

Which of the following is the capital reserve of a company?

  • A. Share premiumCorrect
  • B. Retained profit
  • C. Accumulated depreciation
  • D. Loss on forfeited shares

Explanation

Share premium is a capital reserve because it does not occur every year and it is material in nature.

Accounting 2013 Objective — Question 44

Given: Applications were invited by the directors of Abiodun PLC for 500,000 ordinary shares of ₦1:00 each at ₦1:10 per share payable as follows: On application 46k, On allotment 20k, 1st Call 15k, 2nd Call 19k How much is to be paid for application?

  • A. ₦230,000Correct
  • B. ₦280,000
  • C. ₦500,000
  • D. ₦550,000

Explanation

Application money = ₦0.46 × 500,000 = ₦230,000.

Accounting 2013 Objective — Question 45

The issued share capital is the number of shares that are

  • A. authorised by the shareholders
  • B. shared among the directors
  • C. fully subscribedCorrect
  • D. in the share certificate

Explanation

Issued share capital is the portion of authorized share capital which has been offered for subscription and which is fully subscribed for.

Accounting 2013 Objective — Question 46

The distributable profit available to shareholders at the end of each year are the

  • A. total profit and debtors balance
  • B. general reserve and retained profit
  • C. retained profit and fictitious assets
  • D. total profit less creditors balanceCorrect

Explanation

The distributable profit available to shareholders is derived as total profit less amounts owed (creditors balance) — per the printed answer key the correct option is labelled D.

Accounting 2013 Objective — Question 47

The debenture issued at par above the nominal value is said to be issued at a

  • A. cost price
  • B. mark-up
  • C. premiumCorrect
  • D. margin

Explanation

When financial documents (such as debentures) are issued above their nominal (par) value, they are said to be issued at a premium.

Accounting 2013 Objective — Question 48

Accountant-General of the federation is responsible for

  • A. the general supervision of all auditing personnel in all the ministries
  • B. the compilation of annual financial statementCorrect
  • C. the interpretation of rules and regulations affecting the private sectors
  • D. ensuring the efficient operation of the ministries

Explanation

The Accountant-General of the Federation is responsible for the compilation of annual financial statements/government accounts for the year.

Accounting 2013 Objective — Question 49

Given: Assets and Liabilities of a Local Government Bank balance 6,484,000 Cash 900,000 General revenue balances 9,774,500 Accrued salaries 1,220,000 Investments in shares 7,620,000 Vehicles (amount not fully legible in source) Calculate the liabilities of the local government.

  • A. ₦10,994,500Correct
  • B. ₦17,394,500
  • C. ₦18,774,500
  • D. ₦18,874,500

Explanation

Liabilities = Accrued salaries 1,220,000 + General revenue balance 9,774,500 = ₦10,994,500 (Bank balance, cash, investments and vehicles are assets, not liabilities).

Accounting 2013 Objective — Question 50

An instrument which allows public officers to increase expenditure within a year is

  • A. statutory allocation
  • B. Supplementary budget
  • C. virementCorrect
  • D. warrant

Explanation

Virement is a document that enables public officers to increase expenditure for the year out of what has already been budgeted for their office.

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