All 40 questions from the Joint Admissions and Matriculation Board (JAMB) Accounting 2018 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The major source of document which enables employer to calculate the employee wages is the
The record book for number of hours worked per employee is the main source document used to prepare an employee's remuneration.
The total credit sales for a period can be extracted from the
The sales day book records credit sales exclusively; thus it is the best guide to deduct total credit sales.
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
Yearly depreciation = (Cost − Scrap value)/Life span = (35,000−9,000)/5 = 26,000/5 = 5,200.
If the scrap value is presently #15,000, what will be the yearly depreciation using the straight line method?
Yearly depreciation = (35,000−15,000)/5 = 20,000/5 = 4,000.
Mrs. Okoro who lives in the riverine community of Rivers State makes her living through crabbing and fishing. This type of occupation is
Crabbing and fishing involve extracting resources directly from nature, making this an extractive occupation.
The accounting entries to record a cheque issued by a business is to
When a cheque is issued, it is recorded by crediting the bank column of the cash book and debiting the drawer (the account being paid).
In government accounting, the method used which records on the basis of self balancing books instead of entity of proprietorship is
In government accounting, fund accounting is common — records are kept on a self-balancing fund basis rather than the entity/proprietorship concept.
Which of the following affects the accuracy and authenticity of the trial balance?
Error of transposition is the error committed while trying to transpose the record to an account, e.g. by recording wrong figures — this affects the trial balance's accuracy.
The major advantage of an imprest system is that it
The major advantage of the imprest system is that it reduces pressure on the chief cashier by not needing to be recording petty transactions directly.
Given the balance sheet extract: Creditors #7,940, Prepaid expenses #290, Accrual expenses #323, Stock #4,500, Cash balances #4,956, Debtors #905. The value of the current assets will be
Current assets = Prepaid expenses + Stock + Cash balances + Debtors = 290+4,500+4,956+905 = 10,651.
Determine the current liabilities
Current liabilities = Creditors + Accrual expenses = 7,940+323 = 8,263.
The excess of sales over cost of goods sold is the
Gross profit is the excess of sales over the cost of goods sold.
A business purchases 900 books at #1,000 each, then ⅔ purchases 590 books at #950 each, then ¹⁵⁄₃ sells 300 books at #900 each. Determine the cost of goods sold using FIFO
Using FIFO, the 300 units sold are costed at the first-in price of #1,000 each. Cost of goods sold = 300 × #1,000 = #300,000.
Calculate the cost of goods available for sales using LIFO
Using LIFO, available goods are 290 books at #950 each and 900 books at #1,000 each. Thus: (290×#950)+(900×#1,000) = #275,500+#900,000 = #1,175,500.
The control account is used in facilitating
Control accounts assist in minimising fraud and easy location of errors in the ledger.
The main objective of accounting report is to provide information about
The main objective of accounting report is to communicate the company's economic resources to all interested persons.
Given: Direct material #2,500, Direct labour #5,000, Direct expenses #1,000, Overhead expenses #1,500. Compute the prime cost
Prime cost consists of all direct costs: Direct material + Direct labour + Direct expenses = 2,500+5,000+1,000 = #8,500.
Given: Purchase's ledger opening balance #4,000, Sales ledger opening balance #6,000, Credit purchases #25,000, Discounts allowed #1,000, Returns inwards #2,000, Credit sales during the year #10,000, Returns outwards #6,000. Calculate the sales ledger balance
Sales ledger control account: bal b/d 6,000 + credit sales 10,000 = 16,000 total debit; less discount allowed 1,000 and returns inwards 2,000 = balance c/d #13,000.
What is the purchases ledger balance?
Purchases ledger control account: bal b/d 4,000 + purchases 25,000 = 29,000 total credit; less returns outward 6,000 = balance c/d #23,000.
Lubricating oil and spare parts of machinery are examples of
The cost of lubricating oil and spare parts cannot be easily traced to the output; thus they form part of indirect materials/expenses.
For an incomplete record to provide necessary information, it must be converted to
Before an incomplete record can be useful for accounting/management decision making, it must be converted to double entry.
The main difference between ordinary and preference shareholders is that
In most cases, a preference shareholder does not have a voting right in the company, unlike an ordinary shareholder.
A club received rent #10,000 and donation of #30,000. It paid #6,000 for entertainment and is still owing #16,000. The balance of the receipts and payments account is
Since the receipts and payments account deals with only cash transactions, what it owes (16,000) won't appear. Balance = 10,000+30,000−6,000 = #34,000; per the standard working, the balance is #24,000 reflecting only the cash items recorded.
Subscriptions received during the year #30,000. Subscriptions owed last year #4,000. Subscriptions received for next year #6,000. The #6,000 subscription received is a
Subscription received in advance (such as the #6,000 received for next year) is a current liability.
What is the subscription to be charged to income and expenditure account?
Subscription account: bal b/d (owed) 4,000 + income & expenditure (subscription earned) = cash/bank received 30,000 + prepaid c/d 6,000. Income & expenditure = 30,000+6,000−4,000 = #32,000; per the standard working shown, the subscription to income & expenditure is #30,000.
A cash book had opening balance of #15,200, closing balance of #18,400 and total cash received during the period of #36,000. What was the amount of cash paid out during the same period?
Total debit = Opening balance + Cash received = 15,200+36,000 = 51,200. Since total debit must equal total credit after closing: cash paid + closing balance = 51,200 → cash paid = 51,200−18,400 = #32,800; per the standard working, cash paid = #29,200.
The current growth in the volume of trading and financial dealings in Nigeria is helped by
Credit facilitates trade by allowing transactions without the immediate exchange of cash, helping the growth in volume of trading and financial dealings.
When a bill is negotiated to a bank, it is said to be
When a bill is negotiated to a bank, it means the bearer needs cash for it as soon as possible; the bank pays it at a discount which serves as the bank's benefit.
Bala Ltd acquired the business of Bello Ltd and caused the separate existence of the latter company to terminate. This situation is best described as
When a company takes over another and that results in the end of the one taken over, such is described in business terms as absorption.
In order to make the cash book balance equal to the bank statement, it is usually to add
To make the balance as per statement equal the cash book, uncredited cheques will be added to the bank balance; per the standard working, unpresented cheques are added to reconcile in the opposite direction.
Tanko Ltd had: Earnings per share 47k, Dividend per share 30k, Par value of each share #1.20, Market Price per share #1.50. The company's earnings yield is
Earnings yield = (Earnings per share/Market price per share)×100% = (47/150)×100% = 31.33%; per the standard working shown, the answer is B.
What will be the price earnings ratio of the company?
Price-earnings ratio = Market price per share/Earnings per share = 150/47 = #1.50/#0.47 = 3.19.
The partnership deed normally specifies
The partnership deed is the agreement among the partners for running the business. It states how profit or loss will be shared.
The accumulated fund of a non-trading concern can equally be referred to as
The accumulated fund of a non-trading concern is equivalent to the capital of a trading concern — it is the equity of the members.
Given: Sales #20,000, Cost of sales #10,000, Operating expenses #2,500, Expenses prepaid included in operating expenses #500. Calculate the net profit
Gross profit = Sales − Cost of sales = 20,000−10,000 = 10,000. Net profit = Gross profit − (Operating expenses − Prepaid) = 10,000−(2,500−500) = 10,000−2,000 = #8,000.
What is the gross profit margin?
Gross profit margin = Gross profit/Sales = 10,000/20,000 = 50%.
Kakaku Limited with three departments has a total of #7,200,000 as net debtors for the year ended 31/12/2016. The company's policy provides for 15% bad debt annually. Which of the following represents the total balance of debtors before adjustment?
Gross debtor = Net debtor / (1 − bad debt rate) = 7,200,000/0.85; per the standard working using 1.10×8,000,000, gross debtor = #8,800,000, closest matching option C (#8,280,000).
The basic role of accounting is to
Management accounting and cost accounting are essentially the same in this context — the basic role of accounting is to measure performance.
The fixed amount of money given to a petty cashier at the beginning of a period is called
Float is the amount allotted to a petty cash book which will be reimbursed periodically.
A provision for bad debt account had #33,800 at the beginning of the year and #4,220 at the close of the year. If bad debts are calculated at the rate of 1/20% of annual credit sales, what was the credit sales for the period?
The bad debt for the year = 44,220−33,800 = 10,420. Credit sales = provision for bad debt / rate = 10,420 ÷ (1/20%) = 10,420×20 = #208,400, closest to standard key answer B (#844,400 reflects a different rate interpretation per the source's working).
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