Jamb questions

 𝐉𝐀𝐌𝐁 𝟐𝟎𝟐𝟔/𝟐𝟎𝟐𝟕: 𝟐𝟎𝟎 𝐋𝐈𝐊𝐄𝐋𝐘 𝐀𝐂𝐂𝐎𝐔𝐍𝐓 𝐐𝐔𝐄𝐒𝐓𝐈𝐎𝐍𝐒 𝐀𝐍𝐃 𝐀𝐍𝐒𝐖𝐄𝐑𝐒 𝐔𝐒𝐈𝐍𝐆 𝐓𝐇𝐄 𝐉𝐀𝐌𝐁 𝐔𝐓𝐌𝐄 𝟐𝟎𝟐𝟔 𝐒𝐘𝐋𝐋𝐀𝐁𝐔𝐒

PART 1 — QUESTIONS 1–50

Topic 1: Nature and Significance of Book Keeping and Accounting

1. Which of the following best distinguishes book keeping from accounting?

A. Book keeping involves interpretation, while accounting involves only recording

B. Book keeping is concerned mainly with recording transactions, while accounting includes classification, summarization and interpretation

C. Book keeping is for external users only, while accounting is for internal users only

D. Book keeping deals with cost data only, while accounting deals with cash data only

2. Which branch of accounting is primarily concerned with the preparation and presentation of general purpose financial statements for external users?

A. Cost accounting

B. Management accounting

C. Financial accounting

D. Social accounting

3. The major objective of accounting information is to

A. eliminate all business risks

B. provide useful information for decision-making

C. increase sales automatically

D. ensure that all businesses make profit

4. Which of the following is not a user of accounting information?

A. Investors

B. Creditors

C. Managers

D. Competitors with no legitimate interest

5. The accounting concept which assumes that a business will continue in operation for the foreseeable future is known as

A. consistency

B. accrual

C. going concern

D. prudence

6. The convention which requires that expected losses should be recognized immediately, while anticipated gains should not be recognized until realized, is

A. consistency

B. prudence

C. materiality

D. duality

7. Which of the following best explains the business entity concept?

A. The owner and the business are treated as one

B. Only incorporated businesses keep accounting records

C. The business is treated as separate from its owner

D. All business transactions must be in cash

8. An accountant who examines financial records independently and expresses an opinion on them is engaged in

A. taxation

B. auditing

C. book keeping

D. stocktaking

9. For accounting information to be useful, it should possess all the following qualities except

A. relevance

B. reliability

C. comparability

D. secrecy

10. Which of the following is most closely associated with forensic accounting?

A. Preparing cash books

B. Detecting and investigating fraud

C. Preparing payroll vouchers

D. Recording petty cash expenses

Topic 2: Principles of Double Entry

11. A source document issued when goods are returned by a customer to the supplier is

A. debit note

B. credit note

C. invoice

D. receipt

12. The main purpose of books of original entry is to

A. replace the ledger completely

B. make the trial balance unnecessary

C. provide the first systematic record of transactions before posting to the ledger

D. summarize final accounts directly

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13. In the accounting equation, if liabilities increase by ₦20,000 and assets increase by ₦20,000, the effect on capital is that it

A. increases by ₦20,000

B. decreases by ₦20,000

C. remains unchanged

D. doubles automatically

14. Which of the following entries correctly records goods sold on credit to Adebayo?

A. Debit Sales Account, Credit Adebayo Account

B. Debit Cash Account, Credit Sales Account

C. Debit Adebayo Account, Credit Sales Account

D. Debit Purchases Account, Credit Adebayo Account

15. The sales day book is used for recording

A. all sales of goods

B. cash sales only

C. credit sales of goods meant for resale

D. sales of fixed assets on credit

16. A ledger is best described as

A. a book containing original documents only

B. the principal book containing various accounts to which entries are posted

C. a record used only by manufacturing firms

D. a statement showing balances at year end only

17. Which of the following errors will not affect the agreement of the trial balance?

A. Posting one side of an entry twice

B. Omitting one side of an entry

C. Error of principle

D. Casting one account wrongly

18. If rent paid of ₦8,400 is debited to Rent Account as ₦4,800, the trial balance will differ by

A. ₦3,600

B. ₦4,800

C. ₦8,400

D. ₦13,200

19. A suspense account is opened mainly to

A. record bad debts only

B. complete double entry when the trial balance does not agree temporarily

C. store cash differences permanently

D. avoid preparing the trial balance

20. Which of the following is an error of commission?

A. Entering purchase of furniture in Purchases Account

B. Complete omission of a credit purchase from the books

C. Posting a transaction to the wrong personal account of the correct class

D. Recording a sale twice in the sales day book and ledger

Topic 3: Ethics, Professional and Regulatory Bodies in Accounting

21. The ethical quality that requires an accountant to be truthful and straightforward in professional work is

A. objectivity

B. integrity

C. tact

D. promptness

22. An accountant refuses to manipulate figures to please management. This action best demonstrates

A. neutrality and integrity

B. aggression and consistency

C. materiality and prudence

D. duality and relevance

23. Which of the following is a professional accounting body in Nigeria?

A. CBN

B. ICAN

C. CAC

D. FIRS

24. The body responsible for incorporation and registration of companies in Nigeria is

A. ICAN

B. ANAN

C. CAC

D. FRCN

25. The Financial Reporting Council of Nigeria is mainly concerned with

A. fixing market prices of goods

B. setting and monitoring financial reporting standards and compliance

C. collecting company income tax

D. training all accountants in secondary schools

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Topic 4: Cash Book

26. A single-column cash book records

A. cash only

B. cash and discount only

C. cash and bank only

D. cash, bank and discount

27. A double-column cash book may contain

A. cash and discount columns only, or cash and bank columns only

B. sales and purchases columns

C. bank and journal columns

D. discount and ledger columns only

28. In a three-column cash book, the contra entry is used when

A. goods are sold on credit

B. cash is withdrawn from bank for office use or cash is paid into bank

C. discounts are allowed to customers

D. wages are accrued at year end

29. Cash discount is different from trade discount because cash discount

A. is deducted before invoicing

B. is not entered anywhere in the books

C. is allowed to encourage prompt payment

D. is allowed only on damaged goods

30. Which of the following is usually entered on the credit side of the cash book?

A. Cash sales

B. Capital introduced in cash

C. Payment to a creditor

D. Discount received from a customer

31. The imprest system of petty cash is designed mainly to

A. eliminate petty cash fraud completely

B. ensure the petty cashier always begins a new period with a fixed float

C. transfer all expenses to the bank account daily

D. prevent the use of vouchers

32. Which of the following is most likely to be paid out of petty cash?

A. Purchase of motor van

B. Payment for office stationery in small amount

C. Payment of customs duty on imported machine

D. Purchase of land

33. In a three-column cash book, discount allowed appears on the

A. debit side only

B. credit side only

C. asset side of the balance sheet

D. debit side as part of money received from customers

34. When cash is deposited into the bank, the correct entry in the cash book is

A. debit bank column and credit cash column

B. debit cash column and credit bank column

C. debit discount column and credit bank column

D. debit bank column and credit sales account

Topic 5: Bank Transactions and Reconciliation Statements

35. Which of the following is not an instrument of bank transaction?

A. Cheque

B. Pay-in-slip

C. Debit card

D. Invoice

36. A direct debit on the bank statement usually represents

A. a payment made by the bank from the customer’s account on instruction

B. cash stolen from the office

C. goods returned to supplier

D. transfer of drawings to capital account

37. The major reason for preparing a bank reconciliation statement is to

A. replace the cash book

B. identify and explain differences between bank statement balance and cash book balance

C. determine gross profit

D. correct all errors in the ledger automatically

38. An unpresented cheque will cause the balance on the bank statement to be

A. lower than the cash book balance

B. higher than the cash book balance if starting from favourable balances

C. equal to the cash book balance always

D. transferred to suspense account

39. A cheque paid into the bank but not yet credited by the bank is known as

A. dishonoured cheque

B. stale cheque

C. uncredited cheque

D. certified cheque

40. Bank charges appearing first on the bank statement should be entered in the cash book on the

A. debit side

B. credit side

C. sales side

D. contra column only

41. Standing order paid by the bank on behalf of a business should be recorded in the adjusted cash book by

A. debiting bank and crediting expense

B. debiting the relevant expense and crediting bank

C. debiting drawings and crediting sales

D. debiting suspense and crediting bank

Topic 6: Final Accounts of a Sole Trader/Proprietor

42. Cost of goods available for sale less closing stock gives

A. purchases

B. gross profit

C. cost of sales

D. net profit

43. Gross profit is calculated as

A. sales less operating expenses

B. sales less cost of sales

C. sales less drawings

D. sales less carriage inward

44. Which of the following is treated as a current liability in the statement of financial position?

A. Motor vehicles

B. Bank overdraft

C. Fixtures and fittings

D. Capital

45. Provision for doubtful debts is created in order to

A. write off all debtors completely

B. anticipate possible losses from receivables

C. increase sales revenue

D. understate liabilities deliberately

46. An expense incurred but not yet paid at the end of the accounting period is

A. prepaid expense

B. accrued expense

C. deferred income

D. capital expenditure

47. Income received in advance is treated as

A. a current asset

B. a non-current asset

C. a current liability

D. capital reserve

48. Under the straight-line method of depreciation, annual depreciation charge is

A. variable according to the reducing book value

B. the same amount each year over the useful life, if no change occurs

C. based only on market value

D. ignored in the final year

49. Which of the following is an example of capital expenditure?

A. Carriage on goods purchased for resale

B. Repairs to office equipment

C. Purchase of office furniture

D. Wages of factory workers

50. The main difference between bad debts and provision for doubtful debts is that bad debts

A. are estimated losses, while provision is an actual confirmed loss

B. represent actual irrecoverable amounts, while provision is an estimate of possible future losses

C. are shown as liabilities, while provision is shown as asset

D. are created only in manufacturing accounts

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ANSWERS TO QUESTIONS 1–50

1. B

2. C

3. B

4. D

5. C

6. B

7. C

8. B

9. D

10. B

11. A

12. C

13. C

14. C

15. C

16. B

17. C

18. A

19. B

20. C

21. B

22. A

23. B

24. C

25. B

26. A

27. A

28. B

29. C

30. C

31. B

32. B

33. A

34. A

35. D

36. A

37. B

38. B

39. C

40. B

41. B

42. C

43. B

44. B

45. B

46. B

47. C

48. B

49. C

50. B

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PART 2 — QUESTIONS 51–100

Topic 6: Final Accounts of a Sole Trader/Proprietor (continued)

51. Under the reducing balance method of depreciation, the annual depreciation charge

A. remains constant throughout the asset’s useful life

B. increases as the asset gets older

C. decreases as the book value of the asset declines

D. is based on replacement cost only

52. If opening stock is ₦18,000, purchases are ₦92,000, carriage inward is ₦6,000 and closing stock is ₦14,000, the cost of sales is

A. ₦96,000

B. ₦102,000

C. ₦88,000

D. ₦110,000

53. A trader had debtors of ₦50,000. Further bad debts of ₦2,000 are to be written off and provision for doubtful debts is to be maintained at 4% on remaining debtors. The required provision is

A. ₦2,000

B. ₦1,920

C. ₦2,080

D. ₦1,840

54. Which of the following adjustments will increase the net profit of a sole trader?

A. Increase in accrued expenses

B. Increase in provision for doubtful debts

C. Increase in income received in advance

D. Increase in prepaid insurance

55. A sole trader’s capital at the beginning of the year was ₦120,000 and at the end was ₦168,000. During the year, additional capital introduced was ₦20,000 and drawings amounted to ₦12,000. Net profit for the year was

A. ₦40,000

B. ₦36,000

C. ₦20,000

D. ₦16,000

56. Which of the following items is added to gross profit in arriving at net profit?

A. Carriage inward

B. Returns inward

C. Discount received

D. Bad debts

57. An asset purchased for ₦250,000 is to be depreciated by 10% per annum on cost. Its residual value is estimated at ₦25,000. The annual depreciation charge is

A. ₦22,500

B. ₦25,000

C. ₦20,000

D. ₦27,500

58. If rent prepaid at the end of the year is omitted from the final accounts, the effect will be that

A. profit is overstated and assets are understated

B. profit is understated and assets are understated

C. profit is understated and liabilities are overstated

D. profit is overstated and liabilities are understated

59. The statement of financial position of a sole trader shows

A. only assets and expenses

B. assets, liabilities and capital at a point in time

C. sales, purchases and expenses for a period

D. only cash and bank balances

60. Which of the following is most likely to appear in the statement of profit or loss of a sole trader?

A. Drawings

B. Capital introduced

C. Carriage outward

D. Loan from bank

Topic 7: Stock Valuation

61. Stock valuation is necessary mainly to determine

A. the exact market share of a business

B. the value of unsold goods and the correct profit for a period

C. the selling price of all goods

D. the amount of capital introduced by the proprietor

62. The method of stock valuation that assumes the earliest goods purchased are issued first is

A. LIFO

B. FIFO

C. simple average

D. weighted replacement

63. Under FIFO, closing stock is usually valued at

A. the oldest prices

B. the average of all prices

C. the most recent prices

D. the lowest possible price only

64. The method of stock valuation that assumes the latest goods received are issued first is

A. FIFO

B. LIFO

C. simple average

D. standard costing

65. Opening stock consisted of 100 units at ₦20 each. Purchases were 200 units at ₦24 each. If 180 units were issued under FIFO, the value of stock issued is

A. ₦4,320

B. ₦4,000

C. ₦4,520

D. ₦4,800

66. Using the data in Question 65, the closing stock under FIFO is

A. 120 units valued at ₦2,880

B. 120 units valued at ₦2,680

C. 100 units valued at ₦2,400

D. 120 units valued at ₦2,400

67. If prices are rising, the use of LIFO will generally result in

A. lower cost of materials issued and higher profit

B. higher closing stock and higher profit

C. higher cost of materials issued and lower profit

D. lower cost of materials issued and lower profit

68. The simple average price method values issues at

A. the average of the unit prices without regard to quantities

B. the latest purchase price only

C. the total cost divided by total quantity issued

D. the oldest price in store

69. Which of the following is an advantage of FIFO?

A. It values closing stock at relatively recent prices

B. It always gives the lowest possible cost of sales

C. It prevents all stock losses

D. It is based strictly on market selling price

70. Which of the following is a disadvantage of LIFO?

A. It may value closing stock using old and outdated prices

B. It cannot be used when prices are falling

C. It ignores cost of goods sold

D. It is the only method accepted in all circumstances

Topic 8: Control Accounts

71. Control accounts are prepared mainly to

A. replace personal accounts completely

B. summarize transactions in personal ledgers and check arithmetical accuracy

C. record cash transactions only

D. determine bank overdraft

72. The sales ledger control account is a summary of the total transactions affecting

A. creditors

B. debtors

C. cash sales

D. fixed assets

73. An item that would appear on the debit side of the sales ledger control account is

A. returns inward

B. cash received from debtors

C. credit sales

D. discount allowed transferred to profit and loss only

74. Which of the following items is entered on the credit side of the purchases ledger control account?

A. Credit purchases

B. Returns outward

C. Balance b/d of creditors

D. Interest charged by suppliers

75. If opening debtors are ₦40,000, credit sales ₦120,000, cash received from customers ₦90,000, returns inward ₦6,000 and discount allowed ₦4,000, the closing debtors balance is

A. ₦60,000

B. ₦56,000

C. ₦64,000

D. ₦68,000

76. Which of the following is a use of control accounts?

A. They eliminate the need for source documents

B. They help detect errors and omissions in personal ledgers

C. They replace trial balance preparation

D. They are prepared only in nonprofit organizations

Topic 9: Incomplete Records and Single Entry

77. Single entry system is best described as

A. a complete system of double entry

B. a system that records every transaction once in both debit and credit aspects

C. an incomplete and unsystematic method in which some aspects of transactions are omitted

D. a system used only by public limited companies

78. Incomplete records differ from single entry in that incomplete records

A. may contain some double-entry information though not complete

B. never contain personal accounts

C. are used only for manufacturing accounts

D. always provide a trial balance

79. The statement used to ascertain capital under incomplete records is called

A. memorandum account

B. statement of affairs

C. bank reconciliation statement

D. income and expenditure account

80. If total assets are ₦180,000 and liabilities are ₦52,000, the proprietor’s capital by statement of affairs is

A. ₦128,000

B. ₦232,000

C. ₦118,000

D. ₦138,000

81. A trader’s opening capital was ₦90,000 and closing capital was ₦124,000. During the year, drawings amounted to ₦18,000 and additional capital introduced was ₦10,000. Net profit is

A. ₦22,000

B. ₦42,000

C. ₦52,000

D. ₦14,000

82. If gross profit is 25% of sales and sales are ₦200,000, the gross profit is

A. ₦40,000

B. ₦50,000

C. ₦80,000

D. ₦25,000

83. If gross profit is 25% of cost of sales and cost of sales is ₦160,000, sales will be

A. ₦180,000

B. ₦190,000

C. ₦200,000

D. ₦210,000

84. Conversion of single entry to double entry is useful because it enables the trader to

A. avoid calculating profit

B. prepare more reliable final accounts

C. eliminate debtors and creditors

D. stop recording cash transactions

Topic 10: Manufacturing Accounts

85. The primary purpose of preparing a manufacturing account is to determine

A. cost of goods manufactured

B. net realizable value of debtors

C. total sales revenue

D. partners’ capital balances

86. Prime cost comprises

A. direct materials, direct labour and direct expenses

B. direct materials and administrative overhead only

C. direct labour and selling expenses only

D. factory

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