All 50 questions from the Joint Admissions and Matriculation Board (JAMB) Accounting 2015 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The act establishing the Institute of Chartered Accountants of Nigeria (ICAN) came into force on
ICAN was created by the ICAN Act on 1st September, 1965.
Cost reports for the attention of management should reflect
Summary figures are the main item used for management decision-making, not the detailed account.
Responsibility accounting is particularly concerned with
Stock valuation is a responsibility accounting matter because it shows who is responsible for store replenishment, stock keeping, etc.
An advantage of the use of the voucher system is that it
The voucher system ensures that proper records are kept for each transaction, showing details of who is involved as well as the transaction value.
A business transaction is recorded in the book of accounts when the
The owner and the business are treated as separate entities. When the owner withdraws ₦5,000, it is treated just like giving a loan to an outsider — a recordable transaction.
When a transaction causes an asset account to increase, there is
To keep the accounting equation balanced, an increase in an asset account can be caused by an increase in a liability account, introduction of additional capital, or a decrease in another asset.
Given: Bank account ₦59,410; Capital account ₦50,000; Purchase account ₦20,000; Rent ₦2,500; Stationery ₦90; Typewriter ₦6,500; Sales ₦38,500. In preparing a trial balance from this list, what is the total in the debit and credit columns?
Debit total = 59,410+20,000+2,500+90+6,500 = ₦88,500. Credit total = 50,000+38,500 = ₦88,500. Both columns balance at ₦88,500 (option C, allowing for a printing discrepancy in the listed figure).
The purchase of two generators by Hassan Electronics Enterprises should be recorded as
A generator is a long-term asset used in the business, so its purchase should be treated as an acquisition of fixed assets.
If the inventory at the end of the current year is understated and the error is not caught during the following year, the effect is to
Understated closing inventory overstates cost of goods sold, understating income this year; the following year, opening inventory is understated, understating COGS and overstating income — the errors offset over the two years but each year is individually misstated.
The total of the discounts received column in the cash book is posted to the
Discount received is an income, so it must have a credit balance — posted to the credit of the discount received account.
The initial imprest as at July 1st was ₦500. Petty cash vouchers with the custodian by July 15th added up to ₦374. An IOU slip received from a co-worker was ₦65 and there was a shortage of ₦5 cash. The co-worker made refund on July 18th, just before the imprest was replenished. What was the actual cash in the till as at 15th July?
Actual cash = imprest − vouchers − IOU − shortage = 500 − 374 − 65 − 5 = ₦56. The original source marks this question as having 'no answer' provided; based on the given data the closest matching option is B, though the exact figure could not be confirmed.
Using the same information as question 11, the amount required to replenish the payments made from the imprest was
Replenishment should restore the imprest to ₦500, covering the vouchers (₦374) and other payments made. The original source marks this question as having 'no answer' provided; ₦394 is presented as the closest plausible figure, though it could not be independently confirmed from the given data.
State Bank collected on a note for Al-makura Company. This collection, not yet recorded in Al-makura's books, appears on the bank reconciliation as
Since this is a direct credit not yet recorded by the company, it is treated as an addition to the balance per books (cash book) during reconciliation.
Mayana Corporation uses special journals to record its transactions. If one of Mayana's customers returns merchandise purchased with cash (for a refund), it makes an entry in the
Cash refunds for returned merchandise, being an unusual/non-routine transaction, are recorded in the General journal: Dr Sales returns, Cr Cash.
Sobande Incorporation acquired a machine involving: Gross invoice price ₦15,000; Sales tax ₦900; Purchases discount taken ₦300; Freight ₦750; Assembly of machine ₦500; Installation of machine ₦800; Assorted spare parts for future use ₦1,200; Turning and adjusting machine ₦700. What is the initial accounting cost of the machine?
Cost = 15,000+900−300+750+500+800+700 = ₦18,350 (spare parts for future use are excluded as they are a separate inventory item, not part of the machine's cost).
A pottery company had sales of ₦176,000 during the current period and a gross profit rate of 40%. The company's cost of merchandise available for sale during the period was ₦128,000. The company's ending inventory is
Gross profit = 40%×176,000 = ₦70,400. Cost of goods sold = Sales − Gross profit = 176,000−70,400 = ₦105,600. Ending inventory = Cost of goods available for sale − COGS = 128,000−105,600 = ₦22,400.
Wazobia Enterprises' Balance Sheet as at 1/1/95 showed Capital ₦40,000; Assets: Furnishings ₦10,000, Ceiling fan ₦1,500, Cash at hand ₦28,500 (total ₦40,000). By 31/1/95: (i) rent for shop ₦12,000 paid for the year (ii) total purchases ₦15,000 (iii) total sales ₦8,200 (iv) stock of goods left ₦10,000 (v) paid sales boy ₦500. What is the new balance sheet total as at 31/1/95?
Preparing the trading/profit & loss account and balance sheet gives net profit of ₦1,700 and a new balance sheet total of ₦41,700 (Capital 40,000 + net profit 1,700).
Using the same information as question 17, what is the balance on its cash account as at 31/1/95?
Cash = 28,500 − 12,000 (rent) − 15,000 (purchases) + 8,200 (sales) − 500 (sales boy) = ₦9,200.
On 1st January 1993, Lobo Company purchased equipment for ₦18,000. It uses straight-line depreciation and a ₦2,000 salvage value, depreciated over 4 years. On 31st December 1996, it sells the equipment for ₦8,000. In recording this sale, it should reflect
Annual depreciation = (18,000−2,000)/4 = ₦4,000. Accumulated depreciation over 4 years = ₦16,000. Net book value = 18,000−16,000 = ₦2,000. Profit on disposal = 8,000−2,000 = ₦6,000 gain.
The balance on a purchases ledger control account represents the
The purchases ledger control account (total creditors control account) shows the total amount a business currently owes to its suppliers.
A powerful instrument of control over both the sales ledger and the clerk whose duty is to post the ledger is the
The total debtors (sales ledger) control account serves as a check against fraud, since it independently verifies the ledger clerk's postings.
Mini Enterprises Sales Ledger as at 31/12/94 showed: Balance b/f ₦12,750; Total credit sales ₦28,185; Payments by debtors ₦12,112; Discount allowed ₦638; Sales returns ₦1,500. What is the balance due from debtors?
Debit side: 12,750+28,185 = 40,935. Credit side: 12,112+638+1,500 = 14,250. Balance c/d = 40,935−14,250 = ₦26,685.
Total creditor's balance b/f was ₦7,200; total cash payment to suppliers was ₦98,400; total creditor's balance c/f was ₦8,400. Determine the year's purchases.
Total creditors control account: bal b/d (7,200) + purchases = cash paid (98,400) + bal c/d (8,400) = 106,800. Purchases = 106,800 − 7,200 = ₦98,800.
Total debtor b/f was ₦5,600; total cash receipts from debtors and cash sales were ₦153,000; total debtors c/f was ₦6,800. Derive the total sales figure.
Total debtors control account: bal b/d (5,600) + sales = cash received (153,000) + bal c/d (6,800) = 159,800. Sales = 159,800 − 5,600 = ₦154,200.
The statement of affairs prepared from incomplete records can be described as
A statement of affairs is essentially a balance sheet prepared at a particular date, showing the assets and liabilities of a business under incomplete records.
The contribution margin on a job is
Per the source's answer key, contribution margin is treated here as the term used for gross profit in management accounting (note: the standard textbook definition is 'excess of sales revenue over variable costs', option C).
The objective of allocating all costs to products is to
By allocating all costs to products, management can determine the contribution each product makes to the overall profit of the business.
Raw materials inventory at the beginning of a period was ₦46,800 and at the close ₦9,200 was returned. Cost of materials consumed during the period was ₦448,500. What was the total purchases made during the period?
The original source flags this question as incomplete/data-insufficient (closing inventory figure not given). Based on Purchases ≈ Consumed + Returns − Opening Inventory, the closest listed figure is presented, but it should be treated as unverified.
Using the same information as question 28, what is the cost of materials available for use during the period?
The original source flags this question as incomplete/data-insufficient. The cost of materials available for use is generally Opening Inventory + Purchases − Returns; the answer here should be treated as unverified pending the missing data point.
A non-profit-making organization differs from a profit-making one in that
A distinguishing feature of a non-profit-making organization is that it imposes subscriptions and levies on its members as a source of income.
The limitation of the receipts and payments account arises mainly because of the reliance on
Receipts and payments accounts are essentially cash books; they rely heavily on cash movement as evidence of a transaction, ignoring accruals.
The trading account is to a sole trader what the income and expenditure account is to a
The income and expenditure account of a non-profit-making organization is the equivalent of the trading, profit and loss account of a profit-making organization.
Which of the following indicate that a partnership business is in place? (i) There is a business (ii) It is run commonly by partners (iii) It has profit-making in view (iv) Partners' liability is limited
A partnership is characterised by (i) a business existing, (ii) common running by partners, and (iii) intent to make profit; partners' liability being limited (iv) is not a defining feature — the mere presence of a business does not automatically make it a partnership.
When forming a partnership, new partners should record non-monetary assets on the new partnership's books at their
New partners should recognise non-monetary assets contributed to the partnership at their current fair market values.
Umar and Ahmed share profits and losses equally and have capital balances of ₦40,000 and ₦60,000 respectively. If Abdullahi purchases a one-third interest with no bonus, how much will he have to contribute to the partnership?
Total capital before Abdullahi joins = 40,000+60,000 = ₦100,000. One-third of the business worth = (1/3)×100,000 = ₦33,333.
Which of the following is an intangible asset and a measure of a firm's superior earning power?
Goodwill, though intangible, is the asset that reflects a firm's superior earning power/reputation over its competitors.
The price paid by an acquiring company is the
Purchase consideration is the amount a person/company is ready to pay in exchange for taking over another business.
Dan and Baker are in partnership with capital of ₦50,000 and ₦30,000 respectively. Baker drew ₦14,000 in four equal instalments on 31/3, 30/9, and 31/12, with interest on drawings at 6% p.a. What is the interest on the drawing by Baker?
Calculating the time-weighted interest on each of Baker's four instalments at 6% p.a. gives a total interest on drawings of ₦315.
Using the same partnership information (capital ₦50,000 and ₦30,000, interest on capital at 6% p.a.), determine the total interest on capital due to the partners.
Total interest on capital = 6% × (50,000+30,000) = ₦4,800.
The ordinary shareholders enjoy the following rights except to
Ordinary shareholders do not receive dividends at a predetermined rate — that is a feature of preference shares; a company's memorandum does not guarantee ordinary shareholders a fixed dividend rate.
Granada Corporation has net assets of ₦600,000 and contributed capital of ₦180,000. The corporation has 30,000 shares of common stock outstanding with no preferred stock. This suggests that the corporation has
Book value per share = shareholders' equity (net assets) / number of outstanding shares = 600,000/30,000 = ₦20 per share.
Under which of these conditions can a company issue shares at a discount? (i) A resolution must be passed at a general meeting (ii) The amount of discount must be stated in the resolution (iii) The share must have existed for at least six years (iv) On the order of a court
A company can issue shares at a discount if a resolution is passed at a general meeting, the discount amount is stated/authorised in that resolution, and the company has existed for at least one year (not six, as one condition is misstated) — among the given choices, I, II and IV align most closely with the recognised conditions.
The part of equity which is payable on winding up is called
Per the source's answer key, this reserve — created out of the company's profits — is classified as a revenue reserve.
To compute the gearing ratio, divide
Gearing ratio = long term debt / equity capital.
Which of the following entries is affected by a department when goods are charged to it at selling prices?
When goods are charged to a department at selling price, a Mark-up account must be debited to adjust for the difference between cost price and selling (mark-up) price.
The difference between the closure of the books of a branch and those of a separate company is that
A branch always maintains a current account to record its relationship with the head office, unlike a separate company which maintains its own independent accounts.
The term fiscal compliance means
Fiscal compliance means that all associated financial, banking, and other related laws and regulations have been complied with.
In a public corporation, the capital expenditure incurred in a financial period is
In a public corporation, capital expenditure/assets are typically written off in the year in which they are acquired.
Money not required to meet chargeable expenditure in any fiscal year, under a cash accounting basis, should be
If money is not needed for the year in which it was appropriated, it is carried forward to the following financial year.
If a monthly insurance premium is remitted to a company by the state government, the initial deductions from employees are recorded in
Insurance premiums remitted by a state government on behalf of employees are always kept in a special fund account.
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