JAMB Accounting 2018
Questions & Answers

A student might select earned, paid, or due, assuming revenues are recognized when a service is rendered or an invoice is generated. The cash basis of accounting recognizes revenue only when cash is received. Common mistake: Confusing accrual concepts with cash accounting rules.

One might be tempted to choose deposit, loan, or grant, mistaking budget nomenclature for banking or funding terms. Individual items on a government budget are called votes. Common mistake: Using general financial terms instead of specific budgetary terminology.

Options like creditors, investors, or shareholders might look correct if one confuses trade payables with receivables or ownership accounts. Sales ledger control accounts contain the total amount for debtors. Common mistake: Mixing up sales ledgers with purchase ledgers.

Students might make calculation errors by adding or subtracting opening and closing balances incorrectly, or by misplacing discounts. To find the answer, credit purchases are computed as Closing Balance (₦72,600) plus Payments (₦437,000) minus Opening Balance (₦45,600) minus Discount Received (₦18,600), yielding ₦509,600. Common mistake: Forgetting to account for discounts received in control account reconciliations.

It is easy to select easier knowledge of funding sources or calculating total capital easily, assuming departmental accounts handle overarching financial structure. Departmental accounts help determine the profitability of each department, aiding performance evaluation. Common mistake: Confusing departmental performance tracking with whole-business capital accounting.

One might choose accrual, budget, or consolidated fund, believing modern governmental accounting follows commercial standards. Public sector accounting in Nigeria is primarily based on the cash basis. Common mistake: Applying accrual accounting principles to public sector funds.

A student might incorrectly add or subtract inventory and return values in reverse, leading to options like ₦457,700 or ₦440,300. Total purchases are calculated as Materials Consumed (₦448,500) plus Closing Inventory (₦38,600) minus Opening Inventory (₦46,800) plus Returns (₦9,200), resulting in ₦449,500. Common mistake: Incorrectly treating inventory additions and returns in manufacturing accounts.

Options like ₦440,300 or ₦448,500 can be mistakenly picked by omitting inventory adjustments or using consumption figures directly. Materials Available for Use is calculated as Opening Inventory (₦46,800) plus Purchases (₦449,500) minus Returns (₦9,200), giving ₦487,100. Common mistake: Forgetting to factor in material returns when calculating available inventory.

One might choose advance account, balance sheet, or profit and loss account, assuming local governments maintain full corporate financial statements. Local governments in Nigeria maintain debtors' accounts to track amounts owed. Common mistake: Assuming local government accounting mirrors commercial enterprise financial statements.

Students might include items like foreign reserves or posted prices, which are either macroeconomic buffers or pricing mechanisms rather than direct revenue sources. Conventional sources of public revenue include interest, royalties, taxation, and loans. Common mistake: Confusing foreign reserves with government revenue streams.

It is plausible to guess longer durations like 2, 5, or 10 years, confusing short-term operational budgets with capital projects. Recurrent expenditures are expenses for a period not exceeding 1 year. Common mistake: Confusing recurrent operational costs with long-term capital investments.

A student might pick determining accurate returns, keeping stock control, or ascertaining debtor balances, assuming branch reconciliation serves routine inventory tasks. Reconciliation ensures accurate profit or loss determination for branch activities. Common mistake: Confusing day-to-day stock keeping with the primary goal of financial reconciliation.

One might mistakenly retain the opening balance or guess ₦12,000 by miscalculating the gain on investments. The ending fund balance is found by taking the Opening Fund Balance (₦11,000) and adding the Gain on Investments (₦4,000 realized minus ₦3,000 book value), totaling ₦13,000. Common mistake: Omitting the realized gain from the fund balance calculation.

Students could choose ₦9,000, ₦11,000, or ₦16,000 by incorrectly handling partial asset sales and receivables collections. Ending Fund Balance equals Opening Fund Balance (₦11,000) plus Realized Investments (₦2,000) plus Realized Accounts Receivable (₦5,000) minus the remaining unsold investments (₦3,000), which equals ₦13,000. Common mistake: Failing to subtract the remaining unsold portion of investments.

Options such as 5% interest on drawings, loans, or profits might look correct if one assumes all partnership clauses are identical. Partnership agreements often provide for interest on capital and salaries for partners. Common mistake: Assuming partnership agreements reward drawings rather than capital contributions.

A student might select ₦8,500 by calculating a two-year total or ₦17,000 by using the entire acquisition cost. Under the straight-line method, the depreciation expense remains constant, calculated as ₦17,000 divided by 5 years, which equals ₦3,400 per year. Common mistake: Accumulating depreciation amounts incorrectly for subsequent years under straight-line depreciation.

A student might mistakenly calculate the cost of goods sold by adding carriage outwards or omitting carriage inwards, but carriage outwards is a selling expense rather than a production or procurement cost. To find the correct figure, combine the opening stock of ₦50,000, purchases of ₦240,000, and carriage inwards of ₦10,000 to get total goods available, then subtract the closing stock of ₦60,000, which yields ₦240,000. Common mistake: Including carriage outwards in the cost of goods sold calculation.

Options like accounting framework or accounting convention might seem plausible because they also relate to theoretical structures, but the specific tool that establishes principles and procedures is distinct. Accounting standards provide the principles and procedures for organizational accounting. Common mistake: Confusing broad conceptual frameworks with specific procedural standards.

Students might mistakenly select sole proprietor since that business type also relies on specific financial summaries, yet a statement of affairs serves a different specialized purpose. A statement of affairs is prepared to assess the financial position of an insolvent entity. Common mistake: Assuming a statement of affairs is exclusively for standard ongoing sole proprietorships rather than insolvency cases.

One might incorrectly choose revenue expenditure because both terms involve business spending and financial records. Expenditure on long-term assets is classified as capital expenditure. Common mistake: Confusing day-to-day operating expenses with long-term asset investments.