Text Version
What To See The Exam Simulation Version?
Home / Free Subjects / accounting
Free JAMB Past Question for accounting
Q.1A suspense account is created when a trial balance fails to agree. Which of the following errors would be discovered by preparing a suspense account?
A. An error of principle
B. An error of omission
C. A compensating error
D. An error of transposition
A suspense account is created when a trial balance fails to agree. Which of the following errors would be discovered by preparing a suspense account?
A. An error of principle
B. An error of omission
C. A compensating error
D. An error of transposition
Correct Answer: option d
Further reading: Principles of Double Entry : Suspense Account
Show explanation
An error of transposition (e.g., N540 recorded as N450) will cause the trial balance to be out of balance. A suspense account would be used to hold the difference, and the investigation would reveal the transposition error
Q.2The objective of ethics in accounting is to ensure that financial reports are:
A. Prepared by a qualified accountant
B. Free from personal bias and misrepresentation
C. Audited by an external auditor
D. Available to all stakeholders
The objective of ethics in accounting is to ensure that financial reports are:
A. Prepared by a qualified accountant
B. Free from personal bias and misrepresentation
C. Audited by an external auditor
D. Available to all stakeholders
Correct Answer: option b
Further reading: Ethics in Accounting : Objectives of Ethics
Show explanation
Ethical behavior in accounting aims to ensure that financial reports are prepared with honesty, integrity, and fairness, free from personal bias, and present a true and fair view of the organization's financial position
Q.3An 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.4Which of the following is a key feature of a company's final accounts that is not typically found in a sole trader's final accounts?
A. Statement of Financial Position
B. Income Statement
C. Statement of Changes in Equity
D. Trading Account
Which of the following is a key feature of a company's final accounts that is not typically found in a sole trader's final accounts?
A. Statement of Financial Position
B. Income Statement
C. Statement of Changes in Equity
D. Trading Account
Correct Answer: option c
Further reading: Introduction to Company Accounts: Final accounts of companies
Show explanation
A company's final accounts include a Statement of Changes in Equity, which details the changes in the various equity accounts, such as share capital, retained earnings, and reserves16. This is a more complex presentation than the single capital account for a sole trader.
Q.5What 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.6If a business's assets increase by N50,000 and its liabilities decrease by N20,000, what is the effect on the owner's capital?
A. Decrease by N30,000
B. Increase by N30,000
C. Increase by N70,000
D. Decrease by N70,000
If a business's assets increase by N50,000 and its liabilities decrease by N20,000, what is the effect on the owner's capital?
A. Decrease by N30,000
B. Increase by N30,000
C. Increase by N70,000
D. Decrease by N70,000
Correct Answer: option c
Further reading: Principles of Double Entry (Accounting Equation)
Show explanation
The accounting equation is . To maintain the balance, an increase in assets of N50,000 and a decrease in liabilities of N20,000 must result in a corresponding increase in capital of N70,000 (N50,000 + N20,000).
Q.7A purchases ledger contains the accounts of:
A. Debtors
B. Creditors
C. Bank accounts
D. Nominal accounts
A purchases ledger contains the accounts of:
A. Debtors
B. Creditors
C. Bank accounts
D. Nominal accounts
Correct Answer: option b
Further reading: Principles of Double Entry : The ledger and its classifications
Show explanation
The purchases ledger is a subsidiary ledger that contains the individual accounts of all trade creditors (suppliers)
Q.8Which 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.9Upon 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.
Q.10Trade 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.11When preparing a bank reconciliation statement, which of the following items should be added to the cashbook balance?
A. Bank charges
B. Direct debit
C. Dishonored cheque
D. Direct credit from a customer
When preparing a bank reconciliation statement, which of the following items should be added to the cashbook balance?
A. Bank charges
B. Direct debit
C. Dishonored cheque
D. Direct credit from a customer
Correct Answer: option d
Further reading: Bank Transactions and Reconciliation Statements : Adjusted cashbook balance
Show explanation
A direct credit from a customer (e.g., a customer paying directly into the bank account) increases the bank balance but has not yet been recorded in the cashbook. Therefore, it needs to be added to the cashbook to arrive at the adjusted balance
Q.12Which 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.13A sole trader's capital at the beginning of the year was N200,000. At the end of the year, assets were N450,000 and liabilities were N150,000. What is the profit or loss for the year?
A. Profit of N100,000
B. Loss of N100,000
C. Profit of N200,000
D. Loss of N200,000
A sole trader's capital at the beginning of the year was N200,000. At the end of the year, assets were N450,000 and liabilities were N150,000. What is the profit or loss for the year?
A. Profit of N100,000
B. Loss of N100,000
C. Profit of N200,000
D. Loss of N200,000
Correct Answer: option a
Further reading: Incomplete Records and Single Entry: Statement of Affairs
Show explanation
The capital at the end of the year is calculated as Assets - Liabilities, which is N450,000 - N150,000 = N300,000. The profit for the year is the difference between the ending and beginning capital, which is N300,000 - N200,000 = N100,000 profit.
Q.14The Consolidated Revenue Fund (CRF) is primarily used to:
A. Track the capital expenditure of the government
B. Record all government revenue and expenditure
C. Account for loans and borrowings of the government
D. Manage the salaries and wages of civil servants
The Consolidated Revenue Fund (CRF) is primarily used to:
A. Track the capital expenditure of the government
B. Record all government revenue and expenditure
C. Account for loans and borrowings of the government
D. Manage the salaries and wages of civil servants
Correct Answer: option b
Further reading: Public Sector Accounting: Consolidated Revenue Fund
Show explanation
The Consolidated Revenue Fund is the main government account where all revenues are paid and from which all authorized expenditures are made17. It serves as the primary repository for the government's financial transactions.
Q.15The 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.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.17A sole trader purchases a machine for N500,000. The company uses the straight-line method of depreciation at a rate of 10% per annum. What is the book value of the machine after two years?
A. N500,000
B. N400,000
C. N450,000
D. N350,000
A sole trader purchases a machine for N500,000. The company uses the straight-line method of depreciation at a rate of 10% per annum. What is the book value of the machine after two years?
A. N500,000
B. N400,000
C. N450,000
D. N350,000
Correct Answer: option b
Further reading: Final Accounts of a Sole Trader : Adjustments for Depreciation
Show explanation
The annual depreciation is 10% of N500,000, which is N50,000. Over two years, the total depreciation is N100,000 (N50,000 x 2). The book value after two years is the cost minus accumulated depreciation, which is N500,000 - N100,000 = N400,0006.
Q.18Rent for a retail store with three departments is N180,000 per annum. The floor space occupied by Department A, B, and C is 200 sqm, 300 sqm, and 400 sqm, respectively. What is the rent to be charged to Department B?
A. N40,000
B. N60,000
C. N80,000
D. N100,000
Rent for a retail store with three departments is N180,000 per annum. The floor space occupied by Department A, B, and C is 200 sqm, 300 sqm, and 400 sqm, respectively. What is the rent to be charged to Department B?
A. N40,000
B. N60,000
C. N80,000
D. N100,000
Correct Answer: option b
Further reading: Departmental Accounts : Apportionment of expenses
Show explanation
Rent is apportioned based on floor space12. The total floor space is 900 sqm (200+300+400). The proportion for Department B is 300/900. Therefore, the rent for Department B is (300/900) * N180,000 = N60,000.
Q.19Which of the following is a key objective of bookkeeping?
A. To interpret financial information for decision making
B. To systematically record financial transactions
C. To forecast future financial performance
D. To prepare a budget for the coming year
Which of the following is a key objective of bookkeeping?
A. To interpret financial information for decision making
B. To systematically record financial transactions
C. To forecast future financial performance
D. To prepare a budget for the coming year
Correct Answer: option b
Further reading: Nature and Significance of Accounting: Objectives of bookkeeping and accounting
Show explanation
Bookkeeping is the systematic process of recording the financial transactions of a business. It is the foundation upon which accounting is built.
Q.20 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.