JAMB Accounting 2016
Questions & Answers

A student might mistakenly add only the cash contributions or miss specific asset categories, leading to incorrect totals like ₦150,000. Tunde: ₦25,000 + ₦45,000 + ₦80,000 = ₦150,000. Bola: ₦15,000 + ₦90,000 + ₦20,000 = ₦125,000. Total = ₦275,000 (B) by summing all contributed assets and cash for both partners. Common mistake: failing to combine all non-cash equipment, shop, and furniture valuations into each partner's capital share.

Students might mistakenly choose options like A or D if they mistakenly invert the capital figures or simplify incorrectly. By evaluating Tunde's ₦150,000 contribution against Bola's ₦125,000 contribution, the respective share amounts produce a ratio of 150,000 to 125,000, which reduces down to 6:5. Common mistake: Inverting the order of names and matching them to the wrong side of the ratio.

Learners could incorrectly lean toward option A or D by confusing the book of prime entry with ledger summaries or trial balance functions. The general journal systematically captures business transactions sequentially by date of occurrence before they get posted elsewhere. Common mistake: Thinking the general journal replaces the need for a trial balance.

Options like A or C might look tempting if one confuses financial position statements with day-to-day bookkeeping or trading calculations. The statement provides a detailed breakdown of assets, liabilities, and capital on a specific date to reveal financial position. Common mistake: Confusing the purpose of a balance sheet with an income statement.

A student might select option B or D through arithmetic errors when combining cash received with debtor balances. Total sales are determined by taking the closing debtor balance of ₦9,200, adding back cash received of ₦42,000 and bad debts of ₦300, then subtracting the opening debtor balance of ₦8,500 to arrive at ₦43,000. Common mistake: Forgetting to add back bad debts and cash received when reconstructing sales control accounts.

An incorrect option like A or B could be chosen if additional capital or drawings are subtracted instead of added. Profit is calculated by taking the closing capital of ₦22,000, subtracting the opening capital of ₦15,000, adding back drawings of ₦2,500, and deducting additional capital of ₦5,000 to yield ₦9,500. Common mistake: Treating drawings as a reduction of profit instead of adding them back to find net profit.

One might mistakenly guess option C or D by miscalculating percentages or using closing capital figures. Applying the 5% rate directly to the opening capital of ₦15,000 gives an interest value of ₦750. Common mistake: Applying the percentage to total liabilities or closing capital instead of opening capital.

Options like A or D could be mistakenly chosen if someone treats long-term equipment purchases as a minor operating expense or a capital reduction. Because a computer functions as a long-term resource, its acquisition is classified as a fixed asset purchase. Common mistake: Expensing equipment immediately instead of capitalizing it as a fixed asset.

A candidate might pick option A or C by failing to sum both partners' total appropriations together. Chidi's total allocation is ₦4,300 and Nkechi's total allocation is ₦3,700, and combining these individual amounts gives a net profit of ₦8,000. Common mistake: Only calculating one partner's share instead of summing all partners' shares for net profit.

Distractors like A or C are plausible if one assumes a partnership can convert to a sole proprietorship without legal transfer steps. Partnership dissolution requires formally transferring assets to the new individual owner. Common mistake: Believing a partnership can alter its ownership structure without officially transferring assets.

Options such as A or B might be chosen if a student assumes multi-column books are always better. A single-column cash book tracks exclusively cash transactions, making it ideal for simplicity in smaller trading environments. Common mistake: Overcomplicating small business setups by choosing multi-column books when a single-column book suffices.

Options like B or D are likely picks if a student confuses general journal columns or purchase logs with sales logs. The sales day book logs credit sales specifically using columns for the date, particulars, invoice number, and amount. Common mistake: Mixing up the inclusion of invoices and folio details in day books versus ledgers.

A student might select option A or C through misallocating asset items against capital items. Assets equal liabilities plus capital, meaning total assets equal ₦195,000 plus cash, while liabilities plus capital equal ₦205,000, leaving a balancing cash figure of ₦20,000. Common mistake: Forgetting to balance the accounting equation components correctly when isolating cash.

Distractors like A or C could be picked if certain ledger balances are omitted from the summation. Adding up all individual debit items and all credit items yields balanced totals of ₦430,000 on both sides. Common mistake: Failing to include all ledger accounts when calculating trial balance totals.

Options like A or D might be selected if a student lumps reserves together with share capital. Invested capital strictly refers to the share capital component of ₦150,000. Common mistake: Confusing general reserves with invested share capital.

Options such as A or C are attractive if one forgets to include bank overdrafts under current liabilities. Total liabilities are found by adding creditors of ₦20,000 and the bank overdraft of ₦10,000 to equal ₦30,000. Common mistake: Omitting bank overdrafts from total current liability calculations.

One might choose option B or D through small summation errors in the ledger extracts. Summing the valid debit accounts and matching them against the credit accounts results in a trial balance total of ₦22,000. Common mistake: Double-counting or missing items like drawings during trial balance extraction.

Options like B or D could be chosen if current assets or current liabilities are incorrectly combined. Working capital is calculated by taking total current assets of cash ₦2,000, inventory ₦1,500, and debtors ₦1,000 to get ₦4,500, then subtracting current liabilities of creditors ₦1,200 and bank overdraft ₦800 to leave ₦2,500. Common mistake: Subtracting long-term liabilities instead of current liabilities when computing working capital.

A candidate might pick option B or D if they misapply the capital formula elements. Capital components show that initial capital plus profit minus drawings equals closing capital, where assets of warehouse ₦60,000 and inventory ₦10,000 give an opening capital of ₦70,000, which leads to drawings of ₦8,000 when solved alongside the profit of ₦18,000 and closing capital of ₦80,000. Common mistake: Subtracting profit instead of adding it when working backward to find drawings.

Distractors like A or C are plausible if one confuses contra-asset treatments with nominal ledger entries. The provision for doubtful debts is deducted directly from debtors on the balance sheet. Common mistake: Adding the provision for doubtful debts to debtors instead of deducting it.