JAMB Principles of Accounts 1998 past questions

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

Ten questions from the 1998 JAMB Principles of Accounts paper, with answers and explanations. We hold 45 questions from this paper, and the Skolra app has all of them.

JAMB Principles of Accounts 1998 questions and answers

1.Which of the following entries is effected by a department when goods are charged to it at selling prices?
1. A
  Credit its trading account with the selling price and debit the transferring department's trading account
2. B
  Debit its trading account with the selling price and credit the provision for unrealised profit account
3. C
  Debit its trading account with the cost price and credit the transferring department's trading account
4. D
  Debit its trading account with the selling price and credit the transferring department's trading account
  Correct
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Answer: D
A departmental trading account behaves like any other trading account: whatever comes into the department goes on the debit side (opening stock, purchases, transfers in), and whatever goes out goes on the credit side (sales, transfers out, closing stock).
Here the department is the one being charged, so it is the receiver. It treats the goods like extra purchases and records:
Dr Its own trading account (transfers in) — with the selling price
Cr The transferring department's trading account (transfers out) — with the selling price
2.The total of the discounts received column in the cash book is posted to the?
1. A
  debit side of each supplier's account in the purchases ledger
2. B
  credit side of the discount received account in the general ledger
  Correct
3. C
  debit side of the discount received account in the general ledger
4. D
  debit side of the discount allowed account in the general ledger
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Answer: B
In the three-column cash book, the discounts received column is only a memorandum column. It is not part of the double entry; the double entry is completed in the ledger. At the end of the period the total of that column is posted to the credit side of the Discount Received account in the general ledger.
Why credit? Discount received is a gain (income) to your business — your supplier let you pay less than you owed. And the rule you must never forget is: gains and incomes are credited. The matching debits have already gone to the individual creditors, so one total credit to Discount Received completes the double entry.
3.Responsibility accounting is particularly concerned with?
1. A
  the ascertainment of the total cost of each unit of product manufactured
2. B
  the apportionment of joint process costs between the by-products obtained
3. C
  the reporting of the overall financial position of the firm to outsiders
4. D
  charging controllable costs to the manager in whose area they are incurred
  Correct
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Answer: D
Responsibility accounting is the system that divides an organisation into responsibility centres — cost centres, profit centres and investment centres — and places a named manager over each one. Each manager is then supplied with a report showing only the costs and revenues that fall within his own authority. That is why the answer is charging controllable costs to the manager in whose area they are incurred: the emphasis is on persons and on control, not on products.
4.Umar and Ahemed share profit and losses equally and have capital balances of ₦40,000 and ₦60,000 respectively. If bdullahi purchases one-third interest with no bonus, how much will he have to contribute to the partnership?
1. A
  ₦50,000
  Correct
2. B
  ₦66,667
3. C
  ₦150,000
4. D
  ₦33,333
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Answer: A
The two old partners already have ₦40,000 + ₦60,000 = ₦100,000 in capital. The incoming partner is coming in by investment, and "no bonus" tells you the amount he pays in is credited to his capital account in full — nothing is transferred to or from Umar and Ahemed.
The trick is that the money he brings enters the firm, so it enlarges the capital of which he is claiming one-third. Let his contribution be x:
Capital of the new firm = 100,000 + x
x = 1/3 (100,000 + x)
3x = 100,000 + x
2x = 100,000
x = ₦50,000
5.
A pottery company had sales of ₦176,000 during the current period and a gross profit rate of 40%.
The company's cost of merchandize available for sale during the period was ₦128,000. The company's ending inventory is?
1. A
  ₦22,400
  Correct
2. B
  ₦51,200
3. C
  ₦48,000
4. D
  ₦70,400
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Answer: A
Work down the trading account in the normal order. The gross profit rate of 40% is a percentage of sales, so:
Gross profit = 40% × ₦176,000 = ₦70,400
Cost of goods sold = ₦176,000 − ₦70,400 = ₦105,600 (that is simply 60% of sales)
Now remember what "cost of merchandize available for sale" means: opening stock plus net purchases, that is, everything the company had ready to sell. Whatever was not sold is what remains as closing stock:
Ending inventory = Goods available for sale − Cost of goods sold
= ₦128,000 − ₦105,600 = ₦22,400
So ₦22,400 is the correct closing stock.
6.
Which of the following indicate that a partnership business is in place?
(i) There is a business
(ii)It is run commonly by partners
(iii)It has profit-making in view
(iv) Partners' liability is limited
1. A
  (i), (ii) and (iii) only
  Correct
2. B
  (i), (ii) and (iv) only
3. C
  (ii), (iii) and (iv) only
4. D
  (i), (iii) and (iv) only
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Answer: A
Go straight to the legal definition you were taught: a partnership is "the relation which subsists between persons carrying on a business in common with a view of profit." Break that one sentence apart and it gives you exactly three tests, no more.
7.In a public corporation, the capital expenditure incurred in a financial period is?
1. A
  charged directly to the Consolidated Revenue Fund as a below-the-line payment
2. B
  treated as deferred revenue expenditure and amortized equally over three years
3. C
  capitalized as a fixed asset in the balance sheet and depreciated over its useful life
  Correct
4. D
  written off in full against the revenue of the period in which it was incurred
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Answer: C
Take note of the words public corporation. A public corporation (a parastatal like the Nigerian Ports Authority, NNPC or the Nigerian Railway Corporation) is a self-accounting, commercial-type body. It keeps its books on the accrual basis and prepares a trading, profit and loss account and a balance sheet, exactly the way a limited liability company does.
8.
Mini Enterprises Sales Ledger as at 31/12/94
Read:
N
Balance b/f 12750
Total credit sales 28185
Payments by debtors 12112
Discount allowed 638
Sales returns 1500Prepare the sales ledger control account and determine the balance due from debtors.
1. A
  ₦28,823
2. B
  ₦26,685
  Correct
3. C
  ₦29,685
4. D
  ₦27,323
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Answer: B
In a sales ledger (debtors) control account, anything that increases what customers owe goes on the debit side, and anything that reduces the debt goes on the credit side.
Debit side:
Balance b/f ......... ₦12,750
Credit sales ........ ₦28,185
Total ............... ₦40,935
Credit side:
Payments by debtors ... ₦12,112
Discount allowed ...... ₦638
Sales returns ......... ₦1,500
Total ................. ₦14,250
Balance c/d = ₦40,935 − ₦14,250 = ₦26,685, a debit balance, so ₦26,685 is the amount still due from debtors.
9.The Act establishing the institute of Chartered Accountants of Nigeria (ICAN) came into force on?
1. A
  1st September, 1960
2. B
  15th September, 1965
3. C
  1st October, 1965
4. D
  1st September, 1965
  Correct
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Answer: D
The Institute of Chartered Accountants of Nigeria was set up by the Institute of Chartered Accountants of Nigeria Act No. 15 of 1965, and that Act came into force on 1st September, 1965. That is the date ICAN itself celebrates as its birthday, and it is the date JAMB expects you to give.
The Act charged the Institute with determining the standard of knowledge and skill required of persons seeking to enter the accountancy profession, keeping the registers of fellows, associates and registered accountants entitled to practise as accountants and auditors, and regulating professional conduct.
10.The difference between the closure of the books of a branch and those of a separate company is that?
1. A
  the branch prepares a statement of affairs at closure, while a separate company prepares final accounts
2. B
  the branch writes off its closing balances to capital, while a separate company carries its own balances forward
3. C
  the branch's books are closed only when the whole business is wound up, while a separate company closes its books yearly
4. D
  the branch transfers its net profit or loss to the head office, while a separate company retains its own in its books
  Correct
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Answer: D
Remember one basic fact: a branch is not a separate legal entity. It is simply an arm of the head office. A separate company, on the other hand, is incorporated on its own and is a distinct legal person in the eyes of the law.

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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JAMB Principles of Accounts 1998 past questions

JAMB Principles of Accounts 1998 questions and answers

Practise all 45 questions we hold from the 1998 paper, on a timed CBT screen

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