2017 JAMB ACCOUNTING PAST QUESTIONS AND ANSWER

Dissolution expenses are credited to the realization account. This account is used to settle all assets and liabilities during dissolution. Other accounts (partners capital, revaluation, partners current) serve different purposes.

Capital for a profit-making organization is generated through shares. This involves issuing equity to raise funds. Subscriptions, donations, and gifts are not typical sources for profit-making organizations.

Profits are distributed to partners in their profit-sharing ratio through the appropriation account. This account reflects the allocation of profit among partners. Other accounts serve different purposes.

Depreciation of office machine is charged to the profit and loss account. This reflects the expense incurred due to asset depreciation. Other accounts do not represent the correct treatment of depreciation.

The items on the credit side of purchases ledger control account include III (Dishonored cheque) and IV (Purchases). Other options do not accurately reflect the correct items on the credit side.

When preparing the bank reconciliation statement, you add dividend, uncredited cheque, and credit transfer. Unpresented cheques are not added but rather subtracted.

Net profit = Gross profit – Bad debts – Discount allowed + Discount received = N5,000 – N350 – N500 + N1,000 = N5,150. Other options are incorrect based on this calculation.

Contingencies fund is used to meet unforeseen or urgent expenditure. This fund is specifically set aside for unexpected events. Other funds have different designated purposes.

In the period of rising prices, the FIFO (First in First Out) method of stock valuation is most appropriate. This ensures older, cheaper stock is used first. Other methods may not accurately reflect current costs.

The subsidiary book for return inwards is the sales return journal. This book records goods returned by customers. Other books serve different recording purposes.

A contra entry offsets one amount against another on both sides of the cashbook. This entry ensures balanced bookkeeping. Other options (original entry, prime entry, contract entry) do not fit this specific scenario.

The main purpose of a transaction file is to update master files. This ensures that all transactions are accurately recorded and the master file is kept up to date. Other purposes (recording assets/liabilities, updating income/expenses) are secondary.

Processed data is only useful to users if it is relevant. It must meet the needs and context of the user to be valuable. Complexity, quantitative, and qualitative are aspects but not the primary criterion.

Changes in partnership occur when: the partnership is dissolved, there is amalgamation of partnership, or there is a change in the profit or loss sharing ratio. Intangible asset increase is not a direct cause of partnership changes.

The authority warrant issued prior to the approval of the appropriate bill at the beginning of the year is a provisional general warrant. This ensures that operations can continue until the official approval is received.

Ordinary shares are not a source of income for a non-profit organization. Non-profits typically generate income through entrance fees, subscriptions/dues, and donations.

Net profit = Sales – (Stock Jan 1 + Purchases + Carriage inwards + Carriage outwards) = 9,000 – (2,600 + 4,000 + 500 + 500) = N4,500. Other options are incorrect based on this calculation.

Salaries in arrears are treated as a current liability in the balance sheet. This reflects the short-term obligation of the organization to pay these salaries. Other options do not accurately represent this liability.

Goodwill = Purchase Consideration – (Plant and Machinery + Motor Vehicle + Stock – Current Liabilities) = 400,000 – (190,000 + 170,000 + 60,000 – 50,000) = N30,000. Other options are incorrect based on this calculation.

When starting with the cash book balance in preparing the bank reconciliation statement, you add dividend and credit transfer. Unpresented and uncredited cheques are handled differently.

The pay-in-slip is the main source document for recording cash paid into the bank. This document serves as proof of deposit. Other options (invoice, cheque book, credit note) do not fulfill this specific purpose.

Features of receipts and payment account include: I (records subscription in arrears), II (payments of liabilities), and III (does not show if cash payment is revenue or capital expenditure). Other features may vary.

The movement of goods from head office to a branch is treated as an issue in the head office. This reflects the transfer of stock between locations. Other options do not accurately represent this transaction.

Branch accounts do not allow fraud and wastage of resources. They are important for determining branch profit/loss, controlling branches, and assessing branch manager performance.

The current growth in the volume of trading and financial dealing in Nigeria is helped by increased financial activities. Credit as a factor also contributes, but the primary driver is increased financial activities.

The income and expenditure account in a non-profit organization serves the same purpose as the profit and loss account in a for-profit organization. The other options are incorrect as they do not match these specific features.

Discount received by Department B can be calculated directly from given data without additional computation. Other options include common arithmetic mistakes.

FIFO method aligns the cost of stock sold with the actual flow of stock, maintaining logical stock accounting. Other options either misrepresent FIFO or don’t accurately portray its advantages.

Discount allowed is enjoyed by customers as an incentive for early payment. Other options misrepresent who benefits from this discount in commercial transactions.

Discount allowed by Department A can be calculated from given data. Other options include common errors in arithmetic operations.

Accounting entry for stolen goods involves debiting the branch adjustment account and crediting the branch stock account. Other options involve incorrect accounting entries for theft transactions.

Bank reconciliation ensures all transactions are correctly accounted for. Calculations show ₦21,091 as balance, with other options reflecting incorrect values due to arithmetic errors.

Carriage outward is not included in the trading account as it pertains to selling expenses not directly linked to cost of goods sold. Other options are direct trading account components.

Goodwill arises when a business has super profits or special advantages. Options like admitting new members or expanding the business also indirectly create goodwill, while high loss does not.

Sales amount is determined through cash received, opening and closing balances, discount received and bad debts written off. Correct value needs arithmetic for final sales figure. Other options are result of wrong calculations.

Dissolution of a partnership involves disposal of assets and cessation of business. Introduction of assets does not lead to dissolution; hence only options II and IV are correct.

A three column cash book is designed to handle cash, bank and discount transactions. Other options involve discounts or single transactions, not fitting the three column requirement.

Discount on the left-hand side is discount allowed to debtors. Other options relate to credits and do not correctly place the discount in cash book entries.

Consolidated Revenue Fund is used for government operations funding. Other options relate to reserves or specific funds, not for all governmental operations.

Local government uses financial memorandum for recording and managing finances. Other options refer to higher government levels not using these specific records.

Cash deposit increases bank balance and decreases cash balance. Other options suggest incorrect balance changes not aligning with transaction impacts.

Double entry principle maintains balance through liabilities plus equity equating to net assets. Other options misrepresent the core principle.

Carriage outwards is the cost incurred during the sale of goods, not part of initial cost calculation. Options include varied miscalculations but correct answer is based on given figures.

Correct accounting equation states assets equate to liabilities plus equity. Other options offer wrong mathematical expressions of accounting principles.

Subscription in advance is a current liability as it represents future revenue yet to be earned. Other options misplace the liability within different asset classes.

Master file contains comprehensive records relevant to the organization. Other options refer to specific records or data types, not inclusive of a master file’s scope.

Treasury receipt is the formal proof of payment for government transactions. Other options offer different payment proofs not specifically aligned with governmental protocols.