All 40 questions from the Joint Admissions and Matriculation Board (JAMB) Accounting 2019 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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Staff position in an organization borders on
Staff positions in an organization are advisory in nature — they exist to give advice/support to line management, rather than to exercise direct command authority.
The basic role of accounting is to
Accounting exists to report/measure the performance of an organisation over a particular period of time.
A source document for the sales day book is
The invoice states the quantity and price of goods bought/sold to a particular person, and is the source document for entries in the sales day book.
Calls in advance are treated in the balance sheet as
Calls in advance are monies received for shares which are not yet due; thus, they represent a liability to the organisation.
Use the information below to answer these questions: Dauda Nig Ltd invoiced goods at a cost of ₦10,000 to its Apapa branch at a margin of 20%. The branch later returned goods worth ₦1,200 (at invoice price) to the head office. The profit margin should be
In branch accounting, the profit margin on goods sent to the branch is credited to the branch adjustment account.
Use the information below to answer these questions: Dauda Nig Ltd invoiced goods at a cost of ₦10,000 to its Apapa branch at a margin of 20%. The branch later returned goods worth ₦1,200 (at invoice price) to the head office. What is the correct entry in the head office books at the point of initial transfer of the goods?
Goods sent to branch is debited/credited with the cost plus margin: 20% × ₦10,000 = ₦2,000; ₦2,000+₦10,000 = ₦12,000. The goods sent to branch account would be credited with ₦12,000.
Which of the following accounts is kept by local governments in Nigeria?
Advances accounts are used to record transactions of the local government.
In order to make the cash book balance equal to the bank statement, it is usual to add
Unpresented cheques are added to the balance as per the cash book/adjusted cash book when reconciling with the bank statement.
Papilo Limited with three departments has a total of ₦7,200,000 as net debtors for the year ended 3/12/2017. The company's policy provides for 15% bad debts annually. Which of the following represents the total balance of debtors before adjustment?
Gross debtors = (15%×₦7,200,000) + ₦7,200,000 = ₦1,080,000 + ₦7,200,000 = ₦8,820,000.
One of the shortcomings of single entry procedures is that
In a single entry book, profit will tend to be overstated because all costs are not properly accounted for.
A cash book had opening balance of ₦15,200, closing balance of ₦18,400 and total cash received during the period is ₦36,000. What was the amount of cash paid out during the same period?
Cash paid = Opening balance + cash received − closing balance = 15,200 + 36,000 − 18,400 = ₦32,800.
Cost accounting entails the provision of information to
Cost accounting deals with providing information for management decision making.
Partner's salaries and drawings are usually posted to the
The current account, in a partnership business, is the account that shows the relationship of the business with the owners aside from the fixed capital account.
An entry in a subsidiary book which does not form part of the double entry system is
A memorandum entry is a note made in a subsidiary book for information purposes that does not form part of the double entry system.
Use the information below to answer these questions. Statement of Assets and Liability as at 31/12/2017 (₦m): Shareholders' interest 240; Current liabilities 20; Current assets 110; Fixed assets 140. What is the net working capital?
Working capital = current assets − current liabilities = 110 − 20 = ₦90m.
Use the information below to answer these questions. Statement of Assets and Liability as at 31/12/2017 (₦m): Shareholders' interest 240; Current liabilities 20; Current assets 110; Fixed assets 140. Determine the value of the trade investment.
Investment (a fictitious/balancing asset here) = (capital + liabilities) − (fixed assets + current assets) = (240+20) − (140+110) = 260−250 = ₦10m.
The concise statement used to explain entries in the general journal is known as
The narration in a journal entry briefly explains the nature of the transaction recorded in the journal.
Verifiability in accounting is only possible when there are
Source documents are used to verify that transactions actually occurred, supporting the verifiability of accounting records.
Which accounting concept supports the assertion that economic reality takes precedence over legal issues?
Substance over form is the concept requiring that a transaction be reflected according to its economic substance, rather than merely its legal form.
Use the information below to answer these questions. Motor Vehicle Account as at 31st December, 2001. Debit: January 1, Cost ₦1,950,000; Dec. 1, Depreciation ₦4,000,000. Credit: Jan. 1, Depreciation ₦1,360,000; June 30, Sales Proceeds ₦700,000. The vehicle sold was purchased on January 1, 1998 at a cost of ₦1,000,000 and had depreciation at 25% on cost. Assuming that depreciation is charged on the addition of the year at the rate of 15% on reducing balance, what should be the net book value of the vehicle as at 31st December, 2003?
Depreciation per annum = 15% × 1,950,000 = ₦292,500. Number of years = 6. Total depreciation = 6×292,500 = ₦1,755,000. NBV as at 31 Dec 2003 = 1,950,000−1,755,000 = ₦195,000. (Note: computed NBV is ₦195,000; the source's stated answer letter is A, corresponding to option ₦111,000 — flagged as a possible key/computation inconsistency in the source.)
Use the information below to answer these questions. Motor Vehicle Account as at 31st December, 2001. Debit: January 1, Cost ₦1,950,000; Dec. 1, Depreciation ₦4,000,000. Credit: Jan. 1, Depreciation ₦1,360,000; June 30, Sales Proceeds ₦700,000. The vehicle sold was purchased on January 1, 1998 at a cost of ₦1,000,000 and had depreciation at 25% on cost. What is the actual profit or loss arising from the vehicle disposed of?
Total depreciation at disposal = 1,755,000 + (292,500/2) = ₦1,901,250. NBV at disposal = 1,950,000−1,901,250 = ₦48,750. Profit on disposal = 700,000−48,750 = ₦651,250. (Note: computed profit is ₦651,250, close to but not exactly matching option D — flagged as a possible rounding/source inconsistency.)
In a control account, provision for bad debts is found on the
The sales ledger control account is also known as the total debtors control account. A bad debt (and its provision) is against the balance, so it is posted to the credit side of the sales ledger control account.
Given: Micano Social Club — Cash ₦100,000; Loan ₦30,000; Subscription in arrears ₦5,000; Subscription in advance ₦15,000. What is the accumulated fund?
Accumulated fund = total assets − total liabilities = (100,000+5,000) − (30,000+15,000) = 105,000−45,000 = ₦60,000.
In the balance sheet of a not-for-profit-making organization, subscription paid in advance is regarded as a
Subscription paid in advance is a liability, because it represents income received in advance (for a future period).
Where the debit side of the income and expenditure account is higher than the credit side, the difference is a
If the debit side is higher than the credit side of an income and expenditure account, the difference is a deficit.
A rent received by a trader for sub-letting part of his business premises should be added to the
Rent received is usually added to gross profit in the profit and loss account.
Goods withdrawn from business for private use are credited to
Goods withdrawn for private use are credited to the purchases account, to reduce the cost of goods purchased for resale (and debited to drawings).
Earnings per share is a measure of
Earnings per share measures the leverage of the shareholders'/investors' money — what they get in return for their investment.
The concept that has much influence over asset valuation and income determination is
Conservatism (prudence) has significant influence over asset valuation and income determination, guiding accountants to avoid overstating assets/income.
The double entry principle of accounting was developed by
Luca Pacioli is credited as the originator of the double entry principle of accounting.
Given: Liability ₦23,700; Current assets ₦20,300; Fixed assets ₦64,500. What is the capital introduced by the proprietor?
Capital = assets − liabilities = (64,500+20,300) − 23,700 = 84,800−23,700 = ₦61,100.
In a three-column cash book, the discount allowed is shown on the
Discount allowed is recorded on the debit side of a three-column cash book, since it occurs when debtors pay (recorded alongside the debit-side cash/bank receipts).
If the assets and liabilities of a firm were valued at ₦17,200 and ₦5,120 respectively, the capital of the firm would be
Capital = assets − liabilities = 17,200−5,120 = ₦12,080.
On January 1st 2005, a machine was bought for ₦56,000 to last for 5 years with a residual value of ₦1,000. Calculate the yearly depreciation expense using the straight line method.
Yearly depreciation = (Cost − residual value)/useful life = (56,000−1,000)/5 = 55,000/5 = ₦11,000.
On January 1st 2005, a machine was bought for ₦56,000 to last for 5 years with a residual value of ₦1,000. The rate of the yearly depreciation expense would be
Rate = yearly depreciation/cost × 100% = 11,000/55,000 × 100 ≈ 20%.
Use the information below: Debtors ₦20,000; Provision for bad debts 10%; Provision for discount on debtors 5%. Determine the amount provided for discount allowed on debtors.
Discount allowed = 5% × (20,000 − [10%×20,000]) = 5% × 18,000 = ₦900.
Use the information below: Debtors ₦20,000; Provision for bad debts 10%; Provision for discount on debtors 5%. The provision for bad debt is
Provision for bad debt = 10% × 20,000 = ₦2,000.
A sole trader purchased goods in cash worth ₦2,000 at 2% discount and made a cash sale of ₦1,000 at the same rate of discount. Determine the amount of discount allowed.
Discount allowed relates to the cash sale (discount given to the customer): 2% × 1,000 = ₦20. (The discount on the purchase of goods is discount received, not discount allowed.)
Adedibu, a stock broker, bought stationery for ₦12,000 by cash. To record this transaction, debit
The correct double entry for buying stationery with cash is to debit the stationery account and credit the cash account, reflecting an increase in the stationery asset/expense and a decrease in cash. (Note: the source's stated answer letter did not clearly match this standard double-entry logic — flagged as a possible source inconsistency; the accounting logic itself points to option C.)
Which of the following items are current assets?
Current assets include stock, bills receivable, cash and debtors — all short-term assets expected to be converted to cash or used within a year. Bills payable and bad debts are not current assets.
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