JAMB Accounting 2022
Questions & Answers

One might mistakenly believe this tool calculates net or gross profit, but income statements perform that function instead. A trial balance is utilized specifically to check that total debits match total credits, thereby verifying the arithmetic accuracy of ledger accounts. This makes option B the correct choice. Common mistake: Believing a trial balance measures profitability rather than mathematical correctness.

Students might be tempted to select ₦250,000 as the final expense by ignoring the prepaid portion listed in the options. To isolate the true expenditure for the current period, the advance payment must be subtracted from the total balance, yielding ₦250,000 minus ₦60,000, which equals ₦190,000. Option A is thus correct. Common mistake: Failing to deduct prepaid expenses from the ledger balance for the current period.

Terms like matching or conservatism might confuse readers looking at accounting conventions. The concept that presumes a business will remain operational indefinitely without facing liquidation is known as the going concern principle, confirming option B. Common mistake: Confusing the going concern assumption with the matching principle of expense recognition.

Distractors reverse or mix up inventory terms, making incorrect sequences like adding closing stock look tempting at a glance. To correctly compute the cost of raw materials used, one must add purchases to the opening stock and then subtract the closing stock. This formula highlights option A as the right answer. Common mistake: Incorrectly adding closing inventory instead of subtracting it from the sum of opening stock and purchases.

A student might incorrectly think cash is involved because of options referencing cash accounts. Since the transaction occurred on credit, no cash changed hands immediately; instead, the equipment account must be debited and the creditor account credited, matching option B. Common mistake: Forgetting that credit transactions involve creditors or debtors rather than cash.

Options like ₦25,000 or ₦35,000 might seem like plausible random calculations to a hurried test-taker. The correct interest is found by computing 5% of the contributed capital of ₦600,000, which results in ₦30,000, making option B the correct answer. Common mistake: Miscalculating percentage computations on capital contributions.

Options showing cash might confuse those who overlook the credit nature of the transaction. Because goods were sold on credit, the customer owes money, requiring a debit to the debtor account and a corresponding credit to the sales account, designating option B as correct. Common mistake: Crediting the cash account during a transaction that does not involve immediate payment.

A student might forget to add additional capital or subtract drawings, leading to incorrect alternative values from the list. Closing capital is accurately derived by taking the opening capital, adding net profit and additional capital, and then subtracting drawings (₦150,000 plus ₦80,000 plus ₦15,000 minus ₦25,000), which equals ₦220,000. Option C is correct. Common mistake: Omitting drawings or additional capital adjustments when calculating final capital.

One might guess it tracks cash or records details, but descriptive narration handles those tasks. A folio number exists primarily to allow easy cross-referencing between ledger entries and original journals, making option B the correct choice. Common mistake: Confusing folio numbers with transaction descriptions or account balances.

A common error is dividing the full cost without accounting for residual value. The straight-line method requires subtracting the residual value from the cost first (₦300,000 minus ₦20,000 equals ₦280,000) and then dividing by the useful life of 4 years to arrive at ₦70,000, making option A correct. Common mistake: Forgetting to subtract the residual value prior to calculating annual depreciation.

Students might think it handles accruals or prepayments, which have their own specific ledger entries. A suspense account is exclusively a temporary holding space used to balance the trial balance when errors are detected until corrections can be made, making option B correct. Common mistake: Confusing suspense accounts with adjusting entries for prepayments and accruals.

Options like ₦210,000 or ₦250,000 might result from adding instead of subtracting unpresented items. To reconcile back to the cash book balance, start with the bank statement balance, add uncredited lodgments, and subtract unpresented cheques (₦200,000 plus ₦20,000 minus ₦30,000), yielding ₦190,000. Option B is correct. Common mistake: Treating unpresented cheques as additions rather than subtractions when reconciling.

Trading or profit and loss accounts focus on income and expenses over a duration, which might confuse some students. A snapshot of assets, liabilities, and capital at a precise, specific date is provided solely by the balance sheet, rendering option C correct. Common mistake: Confusing the dynamic nature of income statements with the static snapshot of a balance sheet.

Distractors like ₦200,000 or ₦300,000 might appeal to students who mix up gross profit with net calculations. Administrative expenses are isolated by taking gross profit, subtracting net profit, and then removing selling expenses (₦500,000 minus ₦200,000 minus ₦120,000), which leaves ₦180,000. Option A is correct. Common mistake: Incorrectly combining gross and net profit figures without accounting for all intervening expenses.

A student might pick ₦400,000 by ignoring the write-off entirely or add the figures together. Writing off a bad debt means the debtors cannot pay, so the amount must be deducted from the existing total (₦400,000 minus ₦15,000), resulting in ₦385,000. Option A is correct. Common mistake: Adding written-off bad debts back to the debtor ledger balance instead of subtracting them.

Options involving debtors might tempt those who think a recovery reverses the original write-off directly on the customer's ledger. When bad debt is recovered, it is treated as a separate income recovery, requiring a debit to the cash account and a credit to the profit and loss account, making option A correct. Common mistake: Re-establishing the debtor account when a recovery occurs instead of recording it as income.

Multiplying the shares by the dividend rate alone might lead to a smaller wrong option if the share price is ignored. The total value must first be found by multiplying 100,000 shares by ₦3.00, and then calculating 10% of that total, which equals ₦30,000. Option B is correct. Common mistake: Calculating the dividend percentage on the share quantity rather than the total monetary value of the shares.

Options like ₦68,000 or ₦78,000 ignore the balance between total assets and total liabilities. Capital is determined by summing all assets (₦30,000 plus ₦10,000 plus ₦20,000 plus ₦15,000 equals ₦75,000) and subtracting total liabilities (₦12,000 plus ₦5,000 equals ₦17,000), resulting in ₦58,000. Option A is correct. Common mistake: Failing to aggregate all individual asset or liability items before computing capital.

A student might accidentally calculate Department Y's share or mix up the fractions. Department X's share is found by creating a fraction of its sales over total sales and multiplying by the total expenses (₦400,000 divided by ₦1,000,000, multiplied by ₦200,000), yielding ₦80,000. Option A is correct. Common mistake: Applying the wrong departmental sales ratio to the total shared expense.

A student might incorrectly select option A or D by misapplying the formula, such as subtracting the closing stock instead of adding it, or subtracting purchases. To determine the correct figure, one must combine the starting inventory of ₦12,000 with total purchases of ₦48,000 to find total goods available, and then subtract the ending inventory of ₦8,000 to arrive at the correct cost of goods sold. Common mistake: Forgetting to subtract the closing stock from the cost of goods available for sale.