JAMB Accounting 2002
Questions & Answers

A student might mistakenly choose commission and debit notes or other combinations containing items already handled in the books. Interest received and direct credits, such as customer payments, are the correct choices because they appear in the bank statement first but have not yet been recorded in the cash book, making them necessary for updating it. Common mistake: Forgetting which items originate on the bank statement versus the cash book.

One might mistakenly select other combinations of acronyms that sound official, but the correct regulatory bodies are ICAN and ANAN. ICAN stands for the Institute of Chartered Accountants of Nigeria, and ANAN stands for the Association of National Accountants of Nigeria, both of which are officially recognized. Common mistake: Mixing up the official statutory accounting boards of Nigeria with similar-sounding international bodies.

A student could mistakenly choose a balance sheet or a trial balance, confusing financial statements with the primary documents that initiate record-keeping. The payment voucher is correct because it serves as a source document, providing essential evidence for recording transactions. Common mistake: Confusing final financial reports with original source documents.

A student might mistakenly calculate N700 or N1000 by misapplying adjustments or getting distracted by the initial unequal balances of N900 and N800. The trial balance total is N900 because, after all corrections are made, both the debit and credit sides balance evenly at N900. Common mistake: Using pre-adjustment figures instead of post-correction balances.

An unwary student might select N2,000 by confusing the total original capital with the withdrawal amount, or N500 by subtracting instead of multiplying. The amount withdrawn is N1,500 because taking out 75% of N2,000 equals 0.75 multiplied by N2,000. Common mistake: Confusing percentage calculations with the base amount.

A student might mistakenly choose a different figure like N950 by dividing by two, assuming a partial calculation is needed. The cash book sales total is N1,900 because transactions of this type are directly recorded as stated for the period. Common mistake: Overthinking straightforward transaction values.

One might mistakenly debit the cash account and credit the bank account, reversing the direction of the funds. Depositing cash into the bank is recorded by debiting the bank, which increases the bank balance, and crediting cash, which decreases the cash balance. Common mistake: Reversing cash and bank entries during a bank deposit.

A student might mistakenly select the realization concept or conservatism, confusing the overarching principles of valuation and revenue recognition. The substance over form concept is correct because it explicitly prioritizes the economic substance of transactions over their strict legal structure. Common mistake: Confusing legal compliance with economic reality principles.

Options like cash and bank accounts or general ledger combinations might look plausible for double-entry tracking. Discount received and allowed are the correct answer because they are recorded directly within ledger accounts, thereby completing the double entry entirely within the ledger. Common mistake: Assuming all double entries require external cash or bank records.

A student might mistakenly select N500 by subtracting liabilities from capital instead of adding them together. Assets equal N1,500 because the fundamental accounting equation dictates that Assets are calculated by adding Capital and Liabilities together, resulting in N1,000 plus N500. Common mistake: Mixing up the arrangement of the accounting equation components.

One might mistakenly select financial accounting or trial balancing, thinking of advanced reporting stages. Bookkeeping is the correct answer because it involves recording transactions, representing the initial recoupment phase of accounting. Common mistake: Confusing the initial recording phase of bookkeeping with final financial statements.

A student might mistakenly choose to add the provision to current liabilities or credit it to the profit and loss account. The balance on the provision for depreciation account is correctly deducted from fixed assets to accurately show the net book value. Common mistake: Treating contra-asset accounts like liabilities instead of deductions from assets.

A student could mistakenly compute a profit or choose a different loss figure by miscalculating the depreciation percentage or the net book value. The depreciation is 25% of N1,000, which equals N250, leaving a net book value of N750; selling the vehicle for N500 results in a loss of N250 because N500 minus N750 equals -N250. Common mistake: Forgetting to subtract the net book value from the sale price to find the final gain or loss.

A student might mistakenly compute a straight-line depreciation instead of reducing balance, arriving at a different total like N280,000. The net book value is N289,000 because in Year 1 depreciation is 15% of N400,000 (N60,000), leaving N340,000, and in Year 2 depreciation is 15% of N340,000 (N51,000), making total depreciation N111,000 subtracted from N400,000. Common mistake: Applying the depreciation percentage to the original cost in subsequent years instead of the reducing balance.

One might mistakenly select a value higher than total assets or subtract incorrectly to get N430,052. Capital employed is N430,444 because it is derived by subtracting current liabilities from total assets, taking N440,444 and subtracting N10,000. Common mistake: Adding liabilities to assets instead of subtracting current liabilities.

A student might mistakenly omit drawings or miscalculate the sum, choosing N417,052. The total fixed assets value is N418,720 because you add the land and building value of N410,000, the drawings allocated to fixed assets of N3,000, and the furniture value of N5,720 together. Common mistake: Forgetting to include drawings allocated to fixed assets in the total asset valuation.

A student might mistakenly reverse the entries by debiting the provision and crediting the profit and loss account. The correct treatment is to debit profit and loss as an expense and credit the provision for discount allowed as a liability or contra-account. Common mistake: Reversing the debit and credit sides for provisions.

One might mistakenly select N15 or N30 by dividing incorrectly or guessing based on unrelated figures. The periodic weighted average price per unit is N25 because you divide the total cost of N3,000 by the total number of units, which is 120. Common mistake: Multiplying the units by the cost instead of dividing to find the unit price.

A student might mistakenly subtract cash received from credit sales or omit the opening balance, arriving at N9,500. The closing balance is N9,400 because you take the opening balance of N8,000, add the credit sales of N5,000 to get N13,000, and then subtract the cash received of N3,600. Common mistake: Forgetting to include the opening balance when calculating control account closing balances.

Students might mistakenly choose options involving the debit side of the debtors' control account by confusing which side receives the offsetting entry. To find the correct side, we look at how a contra entry functions to offset a debit in the creditors' control account; to achieve this balance, it credits the debtors’ control account. Common mistake: Confusing the debit and credit sides of control accounts when posting contra entries.