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Free JAMB Past Question for accounting
Q.1 Which of the following branches of accounting focuses on providing information to management for internal decision-making?
A. Financial Accounting
B. Auditing
C. Cost Accounting
D. Taxation
Which of the following branches of accounting focuses on providing information to management for internal decision-making?
A. Financial Accounting
B. Auditing
C. Cost Accounting
D. Taxation
Correct Answer: option c
Further reading: Nature and Significance of Accounting (Branches of Accounting)
Show explanation
Cost Accounting is a branch of accounting that deals with the recording, analyzing, and reporting of costs. It provides valuable information to management to help them in planning, controlling, and making decisions.
Q.2Which of the following items is included in the calculation of Prime Cost?
A. Factory overheads
B. Direct materials
C. Administrative expenses
D. Selling and distribution expenses
Which of the following items is included in the calculation of Prime Cost?
A. Factory overheads
B. Direct materials
C. Administrative expenses
D. Selling and distribution expenses
Correct Answer: option b
Further reading: Manufacturing Accounts: Prime Cost
Show explanation
Prime cost is the total of all direct costs of production. It is calculated by adding direct materials, direct labor, and other direct expenses. Factory overheads are indirect costs.
Q.3Trade discount is a reduction in price given:
A. For prompt payment
B. For bulk purchases
C. For paying with cash
D. For bad debts
Trade discount is a reduction in price given:
A. For prompt payment
B. For bulk purchases
C. For paying with cash
D. For bad debts
Correct Answer: option b
Further reading: Cashbook : Discounts
Show explanation
Trade discount is a reduction in the list price of goods given by a seller to a buyer, usually for bulk purchases. It is not recorded in the books of accounts.
Q.4The primary reason for converting a single entry system to a double entry system is to:
A. Determine the capital of the business
B. Calculate the gross profit of the business
C. Prepare a complete set of financial statements
D. Track the cash and bank balances accurately
The primary reason for converting a single entry system to a double entry system is to:
A. Determine the capital of the business
B. Calculate the gross profit of the business
C. Prepare a complete set of financial statements
D. Track the cash and bank balances accurately
Correct Answer: option c
Further reading: Incomplete Records and Single Entry : Conversion of single entry to double entry
Show explanation
A single entry system is an incomplete record-keeping system27. Converting to a double entry system allows for the preparation of a complete and more reliable set of financial statements, including a Statement of Financial Position and Income Statement
Q.5The quality that requires an accountant to present a clear, truthful, and understandable financial report is:
A. Honesty
B. Accountability
C. Transparency
D. Fairness
The quality that requires an accountant to present a clear, truthful, and understandable financial report is:
A. Honesty
B. Accountability
C. Transparency
D. Fairness
Correct Answer: option c
Further reading: Ethics in Accounting : Qualities of an Accountant
Show explanation
Transparency is the quality of an accountant to provide clear, complete, and understandable financial information, ensuring that users can see a true and fair view of the business's financial position
Q.6Which of the following is a disadvantage of a manual accounting system?
A. High cost of software and hardware
B. Difficulty in adapting to new accounting principles
C. Potential for human errors and legibility issues
D. Reliance on a stable power supply
Which of the following is a disadvantage of a manual accounting system?
A. High cost of software and hardware
B. Difficulty in adapting to new accounting principles
C. Potential for human errors and legibility issues
D. Reliance on a stable power supply
Correct Answer: option c
Further reading: Information Technology in Accounting : Manual and computerized accounting
Show explanation
Manual accounting systems are prone to human errors in calculations and transcription, and the legibility of handwritten entries can be a challenge.
Q.7A company operates an imprest system with a float of N10,000. At the end of the period, the petty cashier has N1,500 cash remaining and a voucher for N8,500. What is the amount needed to restore the float?
A. N1,500
B. N8,500
C. N10,000
D. N0
A company operates an imprest system with a float of N10,000. At the end of the period, the petty cashier has N1,500 cash remaining and a voucher for N8,500. What is the amount needed to restore the float?
A. N1,500
B. N8,500
C. N10,000
D. N0
Correct Answer: option b
Further reading: Cashbook Concept: Petty Cash and Imprest System
Show explanation
Under the imprest system, the petty cashier is reimbursed for the exact amount spent to restore the float to its original sum4. The amount spent is N8,500, which is the amount of the voucher, so N8,500 is needed to replenish the fund.
Q.8A branch's head office account shows a balance of N80,000, while the head office books show a branch account balance of N95,000. Which of the following would not be a reason for this difference?
A. Goods in transit
B. Cash in transit
C. Errors in the branch books
D. Depreciation of a fixed asset at the head office
A branch's head office account shows a balance of N80,000, while the head office books show a branch account balance of N95,000. Which of the following would not be a reason for this difference?
A. Goods in transit
B. Cash in transit
C. Errors in the branch books
D. Depreciation of a fixed asset at the head office
Correct Answer: option d
Further reading: Branch Accounts: Reconciliation of branch and head office books
Show explanation
The reconciliation of branch and head office books addresses items that have been recorded in one set of books but not the other. Depreciation of a fixed asset at the head office affects the head office's financial position but does not directly involve the branch in a way that would cause a discrepancy between the two accounts.
Q.9A company's cashbook shows a balance of N120,000, while its bank statement shows a balance of N145,000. Which of the following is a possible reason for this discrepancy?
A. An uncredited cheque
B. An unpresented cheque
C. An electronic transfer made by a customer directly into the bank account
D. A bank standing order
A company's cashbook shows a balance of N120,000, while its bank statement shows a balance of N145,000. Which of the following is a possible reason for this discrepancy?
A. An uncredited cheque
B. An unpresented cheque
C. An electronic transfer made by a customer directly into the bank account
D. A bank standing order
Correct Answer: option c
Further reading: Bank Transactions and Reconciliation Statements Concept: Causes of discrepancies
Show explanation
When a customer makes an electronic transfer directly into the bank account, the bank statement will show the deposit, but the cashbook will not have it recorded until the business is notified. This will cause the bank statement balance to be higher than the cashbook balance.
Q.10The accumulated fund of a Not-for-Profit-Making organization is equivalent to which of the following in a commercial business?
A. Owner's Capital
B. Retained Earnings
C. Share Capital
D. Reserves
The accumulated fund of a Not-for-Profit-Making organization is equivalent to which of the following in a commercial business?
A. Owner's Capital
B. Retained Earnings
C. Share Capital
D. Reserves
Correct Answer: option a
Further reading: Accounts of Not-For-Profit-Making Organizations : Accumulated Funds
Show explanation
The accumulated fund represents the net assets of a Not-for-Profit-Making organization, which is similar to the owner's capital in a sole proprietorship or partnership.
Q.11The profit and loss appropriation account is used to:
A. Calculate the net profit for the partnership
B. Distribute the net profit or loss among the partners
C. Determine the total capital contributed by partners
D. Record all expenses and revenues of the partnership
The profit and loss appropriation account is used to:
A. Calculate the net profit for the partnership
B. Distribute the net profit or loss among the partners
C. Determine the total capital contributed by partners
D. Record all expenses and revenues of the partnership
Correct Answer: option b
Further reading: Partnership Accounts : Appropriation Account
Show explanation
After the net profit or loss has been determined in the profit and loss account, the appropriation account is used to allocate this profit or loss among the partners according to their partnership agreement.
Q.12What is the primary purpose of a Memorandum Joint Venture Account?
A. To record the individual transactions of each venturer
B. To determine the profit or loss of the entire joint venture
C. To show the final settlement between the venturers
D. To track the inventory contributed by each venturer
What is the primary purpose of a Memorandum Joint Venture Account?
A. To record the individual transactions of each venturer
B. To determine the profit or loss of the entire joint venture
C. To show the final settlement between the venturers
D. To track the inventory contributed by each venturer
Correct Answer: option b
Further reading: Joint Venture Accounts : Memorandum Joint Venture Accounts
Show explanation
The Memorandum Joint Venture Account is a notional account prepared to determine the total profit or loss of the joint venture141414. It is not a part of the double-entry system of the individual venturers.
Q.13The difference between a two-column cashbook and a three-column cashbook is the presence of an additional column for:
A. Bank transactions
B. Cash transactions
C. Discounts
D. Petty cash
The difference between a two-column cashbook and a three-column cashbook is the presence of an additional column for:
A. Bank transactions
B. Cash transactions
C. Discounts
D. Petty cash
Correct Answer: option c
Further reading: Cashbook Concept: Two and three columnar cashbooks
Show explanation
A three-column cashbook includes columns for cash, bank, and discounts (both received and allowed), while a two-column cashbook only includes cash and bank columns
Q.14Which of the following items would be debited in the Sales Ledger Control Account?
A. Bad debts written off
B. Cash received from debtors
C. Sales returns
D. Credit sales
Which of the following items would be debited in the Sales Ledger Control Account?
A. Bad debts written off
B. Cash received from debtors
C. Sales returns
D. Credit sales
Correct Answer: option d
Further reading: Control Accounts and Self-balancing Ledgers: Sales Ledger Control Account
Show explanation
The sales ledger control account is a summary of all the individual debtor accounts. Credit sales increase the amount owed by debtors, so they are debited to the sales ledger control account.
Q.15An accountant who consistently refrains from personal gain and accurately represents financial data is demonstrating the quality of:
A. Fairness
B. Transparency
C. Integrity
D. Accountability
An accountant who consistently refrains from personal gain and accurately represents financial data is demonstrating the quality of:
A. Fairness
B. Transparency
C. Integrity
D. Accountability
Correct Answer: option c
Further reading: Ethics in Accounting Concept : Qualities of an Accountant
Show explanation
Integrity is a fundamental quality of an accountant, involving being straightforward and honest in all professional and business relationships3. It goes beyond mere compliance and reflects a moral and ethical stance.
Q.16The primary reason for a Joint Venture is to:
A. Avoid paying taxes
B. Share resources and expertise for a specific project
C. Permanently merge two businesses
D. Compete against another company
The primary reason for a Joint Venture is to:
A. Avoid paying taxes
B. Share resources and expertise for a specific project
C. Permanently merge two businesses
D. Compete against another company
Correct Answer: option b
Further reading: Joint Venture Accounts Concept: Objectives of Joint Venture
Show explanation
A Joint Venture is a temporary business arrangement where two or more parties combine their resources and expertise to undertake a specific project, sharing the profits and losses
Q.17The document that represents a loan to a company and promises a fixed rate of interest is a:
A. Share certificate
B. Debenture certificate
C. Prospectus
D. Memorandum of Association
The document that represents a loan to a company and promises a fixed rate of interest is a:
A. Share certificate
B. Debenture certificate
C. Prospectus
D. Memorandum of Association
Correct Answer: option b
Further reading: Introduction to Company Accounts : Issue of shares and debentures
Show explanation
A debenture is a certificate issued by a company acknowledging a loan to the company. Debenture holders are creditors of the company and receive a fixed rate of interest, unlike shareholders who receive dividends.
Q.18In a period of rising prices, which stock valuation method would result in the highest closing stock value?
A. FIFO
B. LIFO
C. Simple Average
D. None of the above
In a period of rising prices, which stock valuation method would result in the highest closing stock value?
A. FIFO
B. LIFO
C. Simple Average
D. None of the above
Correct Answer: option a
Further reading: Stock Valuation : FIFO, LIFO, and Simple Average
Show explanation
FIFO (First-In, First-Out) assumes that the first goods purchased are the first ones sold. Therefore, the closing stock is valued at the most recent purchase prices, which are the highest in a period of rising prices, leading to a higher closing stock value.
Q.19Which of the following is a major advantage of a computerized accounting system over a manual system?
A. Reduced risk of data loss due to power outages
B. Lower initial setup costs
C. Increased speed and accuracy in processing transactions
D. Elimination of the need for internal controls
Which of the following is a major advantage of a computerized accounting system over a manual system?
A. Reduced risk of data loss due to power outages
B. Lower initial setup costs
C. Increased speed and accuracy in processing transactions
D. Elimination of the need for internal controls
Correct Answer: option c
Further reading: Information Technology in Accounting : Advantages of computerized accounting
Show explanation
A computerized accounting system is significantly faster and more accurate than a manual system because it automates calculations, postings, and report generation, reducing the potential for human error
Q.20Upon the dissolution of a partnership, which of the following is the first step in the winding-up process?
A. Payment of creditors
B. Realization of assets
C. Payment of partners' loans
D. Distribution of remaining funds to partners
Upon the dissolution of a partnership, which of the following is the first step in the winding-up process?
A. Payment of creditors
B. Realization of assets
C. Payment of partners' loans
D. Distribution of remaining funds to partners
Correct Answer: option b
Further reading: Partnership Accounts Concept: Dissolution of partnership
Show explanation
The first step in the dissolution of a partnership is to realize the assets, which means selling them off to convert them into cash3434. This cash is then used to pay off liabilities and distribute the remaining funds.