JAMB Principles of Accounts 1995 past questions

Checked by the Skolra question team · Last updated 23 October 2026

Ten questions from the 1995 JAMB Principles of Accounts paper, with answers and explanations. We hold 46 questions from this paper, and the Skolra app has all of them.

JAMB Principles of Accounts 1995 questions and answers

1. 1.Which of the following statement is correct about the head office current account and the branch current account?
   1. A
      They are reciprocal accounts whose balances are equal in amount but on opposite sides
      Correct
   2. B
      Both accounts are maintained in the head office books and closed at the end of the year
   3. C
      The branch current account carries a credit balance while the head office current account carries a debit balance
   4. D
      They are added together and shown as a single asset in the combined balance sheet
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   Answer: A

   Under the current account (reciprocal account) method of keeping branch records, each set of books opens an account for the other party. The head office opens a Branch Current Account in its own ledger, and the branch opens a Head Office Current Account in the branch ledger.

2. 2.A trial balance is usually prepared by an accountant from account balances in the ledger for the purpose of
   1. A
      determining the profit or loss made during the trading period
   2. B
      testing the arithmetical accuracy of the ledger postings
      Correct
   3. C
      ascertaining the financial position of the business on a given date
   4. D
      detecting all the errors committed in the books of account
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   Answer: B

   Remember what double entry does: every transaction is recorded twice, once on the debit side of one account and once on the credit side of another. So when you extract all the ledger balances and list them in two columns, the total of the debit column must agree with the total of the credit column. That agreement test is exactly why the accountant prepares a trial balance — to prove the arithmetical accuracy of the postings and balancing in the ledger.

3. 3.Where a non-profit making organization prepares the account using accruals basis of reporting, the statement showing how well the organization is doing is the
   1. A
      receipts and payments account
   2. B
      statement of affairs
   3. C
      income and expenditure account
      Correct
   4. D
      accumulated fund account
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   Answer: C

   Look carefully at the two clues in the question: accruals basis and how well the organization is doing. "How well it is doing" means performance, and for a club, society or other non-profit body the performance statement prepared on the accruals basis is the income and expenditure account.

4. 4.A payment of cash of ₦20 to John was entered on the receipt side of the cash book in error and credited to John's account. Which of the following journal entry can be used to correct the error?
   1. A
      Dr John's account ₦20; Cr Cash book ₦20
   2. B
      Dr John's account ₦40; Cr Cash book ₦40
      Correct
   3. C
      Dr Cash book ₦40; Cr John's account ₦40
   4. D
      Dr Cash book ₦20; Cr John's account ₦20
   Show answerHide answer

   Answer: B

   First write down what should have happened. Cash of ₦20 was paid out to John, so the proper double entry is Dr John ₦20, Cr Cash book ₦20 — money leaves through the payment (credit) side of the cash book and John's account is debited.

   Now write down what actually happened. The ₦20 was entered on the receipt side of the cash book, that is Dr Cash ₦20, and John's account was credited with ₦20. Both entries landed on the wrong side, so each account is out by twice ₦20.

5. 5.

   Halidu and Hamed are business partners with ₦30,000 and ₦20,000 capital respectively. At the end of the financial year, a profit of ₦12,000, which included Halidu's salary of ₦3,000 was made.

   Halidu's share of the profit is

   1. A
      ₦5,400
      Correct
   2. B
      ₦3,600
   3. C
      ₦4,500
   4. D
      ₦7,200
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   Answer: A

   Take the appropriation in the proper order, my friend. A partner's salary is charged first, and only what is left is shared. The stem says the ₦12,000 included Halidu's salary, meaning the ₦3,000 has not yet been taken out.

   Step 1 – Divisible profit:
   ₦12,000 − ₦3,000 = ₦9,000

   Step 2 – Sharing ratio:
   No agreed ratio is given, so profits follow the capital ratio:
   Halidu : Hamed = 30,000 : 20,000 = 3 : 2 (5 parts in all)

   Step 3 – Halidu's share:
   3/5 × ₦9,000 = ₦5,400

   Cross-check the whole ₦12,000: Halidu ₦5,400 + Hamed (2/5 × ₦9,000) ₦3,600 + salary ₦3,000 = ₦12,000. Everything is accounted for.

6. 6.Which of the following ratios gives an idea of the liquidity of a firm?
   1. A
      Gross profit ratio
   2. B
      Return on capital employed
   3. C
      Debt to equity ratio
   4. D
      Current ratio
      Correct
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   Answer: D

   Liquidity is the ability of a firm to pay its short-term debts as they fall due. So any ratio that measures liquidity must compare what the firm can quickly turn into cash (current assets) with what it owes in the short run (current liabilities).

   That is exactly what the current ratio does:
   Current ratio = Current assets : Current liabilities
   If a firm has current assets of ₦600,000 and current liabilities of ₦300,000, the current ratio is 2:1 - the accepted rule of thumb - meaning there are two naira of short-term assets for every one naira owed. (Its close partner, the acid-test or quick ratio, does the same thing after removing stock.)

7. 7.The purchase ledger control account of a company had an opening balance of ₦45,600 credit and closing balance of ₦72,600 credit. The company made payments of 437,000 to credit suppliers during the period: and had discount received of ₦18,600 on this account. What were the credit purchase for the period?
   1. A
      ₦482,600
      Correct
   2. B
      ₦445,400
   3. C
      ₦428,600
   4. D
      ₦464,000
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   Answer: A

   The purchase ledger control account (creditors control account) is a summary of everything owed to suppliers. Because it is a liability account, the balances are on the credit side, and anything that reduces what we owe goes on the debit side.

   Debit side: payments to suppliers ₦437,000, discount received ₦18,600, closing balance c/d ₦72,600.
   Credit side: opening balance b/d ₦45,600 and the missing credit purchases.

   So make credit purchases the subject:
   Credit purchases = Closing balance + Payments + Discount received − Opening balance
   = ₦72,600 + ₦437,000 + ₦18,600 − ₦45,600
   = ₦528,200 − ₦45,600 = ₦482,600

8. 8.The Asa branch of Emene company Ltd, made a sales of ₦549,000 from the goods sent from the head office during the period ended 31/12/94. These sales were based on a 22% mark up. If branch expenses were ₦34,400 and there were no discrepancies, what should be the profit of the branch for the period?
   1. A
      ₦99,000
   2. B
      ₦86,380
   3. C
      ₦64,600
      Correct
   4. D
      ₦120,780
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   Answer: C

   Remember the golden rule: mark-up is calculated on COST, while margin is calculated on SELLING PRICE. The question says the sales were based on a 22% mark-up, so cost is the base of 100% and sales represent 122%.

   Step 1 - Find cost of goods sold:
   Sales = 122% of cost
   ₦549,000 = 1.22 x cost
   Cost = 549,000 ÷ 1.22 = ₦450,000

   Step 2 - Gross profit:
   549,000 - 450,000 = ₦99,000
   (Cross-check: 22% of ₦450,000 = ₦99,000. Correct.)

   Step 3 - Net profit of the branch:
   Gross profit less branch expenses = 99,000 - 34,400 = ₦64,600. Since the question tells us there were no discrepancies, there is no stock shortage or cash loss to charge against the branch, so ₦64,600 is the answer.

9. 9.

   A charitable club has the following figures:

   N
   Subscriptions received in 1991 2 800
   Subscriptions unpaid in 1990 300
   Subscriptions paid for 1992 150
   Subscriptions due 1991 180

   How much should be charged to the income and expenditure of this club as subscription for 1991?

   1. A
      ₦2,830
   2. B
      ₦3,130
   3. C
      ₦2,530
      Correct
   4. D
      ₦2,170
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   Answer: C

   The income and expenditure account of a club is prepared on the accruals basis, not on cash. So we must convert the ₦2,800 actually received in 1991 into the subscription earned in 1991.

   Work it step by step:
   Subscriptions received in 1991 = ₦2,800
   Less subscriptions unpaid in 1990, ₦300 — that arrear was collected during 1991 but it is 1990 income
   Less subscriptions paid for 1992, ₦150 — money received in advance for next year
   Add subscriptions due for 1991, ₦180 — earned this year, members have simply not paid yet

   ₦2,800 − ₦300 − ₦150 + ₦180 = ₦2,530

10. 10.One major advantage of ledger is that it
    1. A
       eliminates the need to extract a trial balance at the end of the period
    2. B
       classifies transactions into separate accounts so that the balance of each can be seen at a glance
       Correct
    3. C
       provides the original documentary evidence for each transaction
    4. D
       records transactions in the chronological order in which they occur
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    Answer: B

    The ledger is the book of final entry. A transaction is first written in a book of original entry (the journal, the day books or the cash book), then posted to the ledger, where it is filed under its proper account head - Sales account, Rent account, Ojo's account, Motor Van account and so on.

    Because every entry affecting one item is gathered together in that one account, the account can be balanced off and you can tell at once what a customer owes, what has been spent on rent, or what the business owns in motor vans. That is why classifying transactions into separate accounts so that the balance of each can be seen at a glance is the major advantage of the ledger.

The questions come from past JAMB, WAEC and NECO papers. We use software to help write the answer options and explanations, and every answer is checked twice before it goes on the site. How we check

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