All 40 questions from the Joint Admissions and Matriculation Board (JAMB) Accounting 2022 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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1. Ensuring that revenues and expenditures are identified in the accounting period in which they occurred is the
The matching concept states that revenue and expenses should be matched with (recognized in) the accounting year in which they are incurred.
2. The term 'accounting period' means
An accounting period is the period of time covered by a financial statement, usually twelve calendar months.
3. The convention which states that 'profit must not be recognized until realized while all losses should be adequately provided for' is
The conservatism (prudence) concept states that all possible losses must be provided for, but profit should only be recognized when it is actually earned.
4. Externals use accounting information to
External users rely on accounting information to determine the profitability of a company, so as to know where best to invest their money.
5. The accounting entry for cash purchase of assets is
For a cash purchase of an asset, the asset account is receiving value while cash is giving value, so it is debited to the asset account and credited to the cash account.
6. Cost of installing a fixed asset is treated as
The cost of installing any asset forms part of the cost of that asset, so it is debited to the asset account.
7. The father of the principle of double entry is
Lucas Pacioli (Paciolo) is credited as the founder of the double-entry accounting principle.
8. When an amount for asset purchase is entered in business expenses account, the error committed is
An error of principle occurs when a transaction is recorded in the wrong class of account — here, an asset (a real account) is wrongly recorded as an expense.
9. Which of the following does not have a folio?
A ledger does not necessarily require a folio column, unlike the journal, cash book and receipt.
10. The suspense account is used to correct errors that fail
A suspense account is used to correct errors that cause the trial balance to fail to balance.
11. To know how liquid a firm is, ______ is relevant
The quick (acid test) ratio measures how liquid a firm is — current assets excluding stock, against current liabilities.
12. If N450,000 is received for a share of N1 par value issued at N1:50k, how many shares will be issued?
Number of shares = Amount received ÷ Issue price = N450,000 ÷ N1.50 = 300,000 shares.
13. The measure of a company's ability to meet up with debt obligations as at and when due is called
The acid test (quick) ratio is used to know how liquid a firm is — its ability to meet current liabilities using current assets, excluding stock.
14. Departmental accounts will help management to know
Departmental accounts help management determine, after assessing performance, which section of the organization should be discontinued.
15. If debtor balance is #5000 and a bad debt of #250, how much will be credited to the provision for doubtful debt account at the rate of 5%?
Provision for doubtful debt = 5% × (5,000 − 250) = 5% × 4,750 = #237.50.
16. The similarity between the head office current account and the branch current account is that
At the head office, the branch is more or less like a debtor, so the head office account has a credit balance while the branch's current account (recording the head office) has a debit balance.
17. Which of the following sources of revenue is/are shared among the three tiers of government in Nigeria? I. Statutory allocation II. Income tax III. Value added tax
The VAT paid by producing companies is remitted to the federal government and then shared among the three tiers of government.
18. Gusau Local Government spent: Hospital building #300,000, Drugs #15,000, Hospital beds & mattresses #8,000, Doctors' & nurses' salaries #70,000, Administrative expenses #5,000. Revenue expenditures from the above total
Revenue expenditures are expenditures that recur every budget year, i.e. Drugs + Salaries + Admin expenses = 15,000+70,000+5,000 = 90,000.
19. Using the same Gusau Local Government data, capital expenditure is
Capital expenditure is a one-off expense: Hospital building + Hospital beds/mattresses = 300,000+8,000 = 308,000.
20. A governmental accounting system takes
Government accounting is prepared on a cash basis because it is a yearly transaction recorded in the budget that will be executed within the year.
21. The process of allocating the cost of a tangible asset over its useful life is known as
Depreciation refers to the wear and tear of an asset; it is a provision for the future replacement of the asset over its useful life.
22. Control accounts help to
Control accounts minimize fraud because each transaction can be easily traced.
23. Which of the following can help in computing credit sales?
The debtors control account (also known as sales debtors/total sales control account) is used to determine credit sales for a particular period.
24. Discount received is a/an
Discount received is income to the receiver, and is posted to the credit side of the profit and loss account.
25. The total of the debtors at the beginning of the year was N700 and at the end of the year N750. During the year, N9,500 was given to customers and N90 was given in discounts. The sales for the year would be
Using the debtors control account: bal b/d 700 + credit sales(x) = cash/bank 9,500 + discount allowed 90 + bal c/d 750. Solving gives credit sales = 10,340.
26. Capital at beginning N10,000, drawings N1,000, capital at end N17,000, new capital introduced N5,000. What is the profit for the period?
Profit = (Capital at end + Drawings) − (Opening capital + New capital introduced) = (17,000+1,000) − (10,000+5,000) = 18,000−15,000 = #3,000.
27. The accounting entry for the new capital (from the same information) is
For capital introduced into the business, the accounting entry is Dr: cash/bank account, Cr: capital account.
28. The first step in creating double entry for a single entry record is to
The first step in converting a single entry into double entry is to open a balance sheet; from it, the opening balances of each account are used to open a double entry.
29. Which of the following stock valuation methods is suitable for perishable goods?
For perishable goods, it is best to use the First-In-First-Out (FIFO) method of stock valuation, to avoid spoilage.
30. Given Direct material #100,000, Direct labour #70,000, Direct expenses #21,000, Factory overhead #54,000: what is the prime cost?
Prime cost is the sum of all direct costs: #100,000+#70,000+#21,000 = #191,000.
31. Using the same data, what is the cost of goods produced?
Cost of goods produced = Prime cost + Factory overhead (indirect cost) = #191,000+#54,000 = #245,000.
32. The adjustment in value of work-in-process would be
The adjustment in the value of work-in-progress is added to the cost of goods manufactured.
33. The easiest cash book used by a layman is
A single column cash book is easier to use by anybody than any other type of cash book.
34. A general journal will have (in order)
A general journal is laid out in the order: Date, Narration, Folio, Debit and Credit.
35. Which of the following errors will affect the balance of the trial balance?
If an account is not transferred to the trial balance, it will affect the trial balance from balancing.
36. An expense account is treated first as
When an expense is incurred, the accounting entry is: Debit expenses account, Credit cash/bank account.
37. Treating money or goods taken from the business by the owner for personal use as drawings buttresses the accounting concept of
The entity concept states that the organization is different from the owner; thus, when the owner takes something from the business, it is treated as drawings.
38. In which of the following businesses is it most likely to find a single entry?
Most co-operative societies are not managed by professionals, so there is a high tendency that their records will not be properly kept, resulting in single entry bookkeeping.
39. Which of the following can be categorized as fixed cost?
Fixed cost does not change with the level of output. Since factory overhead is made up of items such as production manager's salary and factory security, it is usually considered fixed cost.
40. Which of the following is not a double entry account?
The balance sheet is just a statement, not an account; thus, it is not a double entry account.
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