Engaging with the 2008 JAMB Accounting assessment allows prospective candidates to practice essential computational skills related to financial statements and business mathematics. Several questions consistently target core subjects such as manufacturing accounts, ratio analysis, depreciation calculations, and control account reconciliations. Use this practice session to review the underlying principles behind each correct solution rather than rushing to memorize numerical figures.
Topics in this paper
A company’s trial balance shows a debit balance of ₦150,000 for rent, but ₦30,000 was prepaid. What is the adjusted rent expense in the profit and loss account?
A student might incorrectly select option C (ignoring the prepayment) or D (subtracting incorrectly or using only the prepayment) by failing to adjust for the asset properly. The adjusted rent expense is calculated by subtracting the prepaid rent from the total rent recorded, yielding ₦150,000 - ₦30,000 = ₦120,000, which is the amount charged to the profit and loss account.
In a manufacturing account, the cost of raw materials consumed is calculated as:
A test-taker could mistakenly choose option B, C, or D by misplacing the addition and subtraction signs in the inventory formula. The cost of raw materials consumed in a manufacturing account is determined by adding purchases to the opening stock and subtracting the closing stock, reflecting the materials used during the period.
A partnership agreement stipulates a 5% interest on capital contributions. Partner A contributed ₦500,000, and Partner B contributed ₦300,000. What is Partner A’s interest for the year?
One might mistakenly pick option A, C, or D through calculation errors or by combining both partners' capitals. Partner A’s interest is calculated as 5% of their capital contribution, meaning Interest = 0.05 × ₦500,000 = ₦25,000, credited to Partner A’s account for the year.
The balance sheet of a sole trader shows a net profit of ₦80,000. If drawings were ₦20,000 and additional capital introduced was ₦10,000, what is the closing capital?
A student might incorrectly choose option A, C, or D by treating drawings as an addition or forgetting the additional capital. Assuming an opening capital of ₦0 for simplicity, Closing capital is calculated as Opening capital + Net profit + Additional capital - Drawings, giving ₦80,000 + ₦10,000 - ₦20,000 = ₦90,000.
A machine costing ₦200,000 has a useful life of 5 years with a scrap value of ₦20,000. Using the straight-line method, what is the annual depreciation charge?
A test-taker could mistakenly select option B, C, or D by forgetting to deduct the scrap value or dividing by the wrong number of years. Using the straight-line method, annual depreciation is calculated as (Cost - Scrap value) / Useful life, which equals (₦200,000 - ₦20,000) / 5 = ₦36,000 per year.
The bank reconciliation statement of a company shows a bank statement balance of ₦120,000, unpresented cheques of ₦30,000, and uncredited lodgments of ₦15,000. What is the cash book balance?
One might wrongly pick option B, C, or D by adding unpresented cheques instead of subtracting them, or vice versa. The cash book balance is calculated by adjusting the bank statement balance for unpresented cheques and uncredited lodgments, resulting in Cash book balance = ₦120,000 + ₦15,000 - ₦30,000 = ₦105,000.
A company’s gross profit is ₦250,000, and its net profit is ₦100,000. If administrative expenses are ₦80,000, what are the selling and distribution expenses?
A student might mistakenly choose option B, C, or D by adding expenses to the profit figures instead of working backward from gross profit. Since Net profit = Gross profit - (Administrative expenses + Selling and distribution expenses), Selling and distribution expenses = ₦250,000 - ₦100,000 - ₦80,000 = ₦70,000.
In a not-for-profit organization, an excess of income over expenditure is referred to as:
A test-taker could incorrectly select option A, C, or D by applying commercial business terminology to a charity. In not-for-profit organizations, an excess of income over expenditure is termed a surplus, reflecting funds available for future activities.
A trader’s sales ledger control account shows a balance of ₦450,000. If bad debts of ₦10,000 are written off, what is the new balance?
One might mistakenly opt for option B, C, or D by adding the bad debts or subtracting incorrectly. Writing off bad debts reduces the sales ledger balance, so the new balance is ₦450,000 - ₦10,000 = ₦440,000, reflecting the recoverable amount from debtors.
The cost of goods sold is ₦300,000, and the gross profit margin is 25%. What is the sales figure?
Distractor check: A student might choose option A (₦360,000) by incorrectly taking 20% of the cost instead of working out the proper margin. Reasoning to the answer: Gross profit margin is defined as (Sales - Cost of goods sold) divided by Sales, which equates to 0.25 = (Sales - ₦300,000) / Sales. Multiplying both sides by Sales gives 0.25 × Sales = Sales - ₦300,000, which rearranges to 0.75 × Sales = ₦300,000. Dividing ₦300,000 by 0.75 results in a final sales figure of ₦400,000. Common mistake: Confusing margin with markup, which leads to dividing by 1.25 instead of subtracting the margin percentage from 1.
A company’s share capital consists of 100,000 ordinary shares at ₦2 each. If a dividend of 10% is declared, what is the total dividend paid?
Distractor check: Option A (₦10,000) is a common trap if a student forgets to multiply the number of shares by the share price before applying the percentage. Reasoning to the answer: The total share capital is found by multiplying 100,000 ordinary shares by ₦2 each, giving ₦200,000. Applying the declared 10% dividend to this total capital means calculating 0.1 × ₦200,000, which yields a total dividend paid of ₦20,000 to shareholders. Common mistake: Applying the percentage directly to the share quantity instead of the total monetary value of the share capital.
The double-entry for goods returned by a customer is:
Distractor check: Options A and B mistakenly treat customer returns like standard sales transactions or cash payments, confusing whether sales itself should be debited or credited. Reasoning to the answer: When customers send goods back, the transaction must reverse the original sale and debt. This is accomplished by debiting the Sales returns account to reduce sales figures and crediting the Customer’s account to reduce their overall debt. Common mistake: Crediting the sales account instead of a contra-sales returns account when recording returned goods.
A company’s fixed assets are valued at ₦500,000, with accumulated depreciation of ₦150,000. What is the net book value?
Distractor check: Option D (₦650,000) tempts students who mistakenly add the accumulated depreciation to the asset cost instead of subtracting it. Reasoning to the answer: Net book value is determined by taking the original cost of fixed assets and deducting accumulated depreciation. Subtracting ₦150,000 from ₦500,000 results in a net book value of ₦350,000. Common mistake: Adding accumulated depreciation to asset cost rather than subtracting it.
In a departmental account, Department A has sales of ₦200,000 and Department B has sales of ₦300,000. If the total expenses of ₦150,000 are apportioned based on sales, what is Department A’s share of expenses?
Distractor check: Option B (₦90,000) is easily chosen if a student accidentally calculates Department B's sales share instead of Department A's share. Reasoning to the answer: First, find total sales by adding Department A's ₦200,000 and Department B's ₦300,000 to get ₦500,000. Apportioning the ₦150,000 total expenses based on sales requires multiplying the expense total by Department A's fraction, yielding (₦200,000 / ₦500,000) × ₦150,000, which evaluates to 0.4 × ₦150,000, or ₦60,000. Common mistake: Using the wrong department's sales numerator during the proportional allocation.
A company’s purchases day book was undercast by ₦5,000. What is the effect on the trial balance?
Distractor check: Option B or C might catch students who confuse whether the purchases day book represents a debit or credit entry in the ledger. Reasoning to the answer: An undercast in the purchases day book means that the purchases account, which inherently receives a debit entry, is understated. Consequently, this undervaluation directly causes the debit side of the trial balance to be understated by ₦5,000. Common mistake: Assuming books of prime entry affect credit balances rather than recognizing purchases as debit entries.
The formula for calculating the break-even point in units is:
Distractor check: Option C inverts the formula elements, which trips up students who forget which metric belongs in the numerator. Reasoning to the answer: To discover the required unit volume for covering all expenses, one must divide fixed costs by the contribution per unit, producing the break-even point in units. Common mistake: Placing contribution per unit in the numerator instead of the denominator.
A company’s current assets are ₦200,000, and current liabilities are ₦80,000. What is the current ratio?
Distractor check: Option A (1.5:1) might be selected through incorrect arithmetic division or mixing up asset and liability positions. Reasoning to the answer: The current ratio is computed by dividing current assets by current liabilities. Dividing ₦200,000 by ₦80,000 gives 2.5:1, which effectively measures the company's liquidity position. Common mistake: Inverting the ratio formula by putting liabilities over assets.
A provision for doubtful debts is created at 5% of debtors amounting to ₦100,000. What is the provision amount?
Distractor check: Option C (₦10,000) can be chosen by accidentally doubling the percentage or miscalculating decimal placements. Reasoning to the answer: The provision for doubtful debts is calculated by taking 5% of the total debtors' balance. Evaluating 0.05 multiplied by ₦100,000 provides a provision amount of ₦5,000, which is set aside for potential bad debts. Common mistake: Misplacing the decimal point when calculating percentages.
A company’s prime cost includes:
Distractor check: Option A includes factory overheads, which confuses direct production inputs with indirect manufacturing expenses. Reasoning to the answer: Prime cost represents all direct costs attributable to production, which specifically comprises direct materials, direct labor, and direct expenses. Common mistake: Including indirect overhead costs in the prime cost calculation.
A trader’s cash book shows a debit balance of ₦50,000. If a cheque of ₦10,000 issued was not yet presented, what is the bank statement balance?
Distractor check: Option A (₦40,000) is a tempting error if a student subtracts the unpresented cheque instead of adding it. Reasoning to the answer: The bank statement balance is derived by taking the cash book balance and adding unpresented cheques that have not yet cleared the bank. Adding ₦10,000 to the debit balance of ₦50,000 results in a bank statement balance of ₦60,000. Common mistake: Subtracting unpresented cheques from the cash book balance during bank reconciliation.
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