JAMB Principles of Accounts 1999 past questions

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

Ten questions from the 1999 JAMB Principles of Accounts paper, with answers and explanations. We hold 50 questions from this paper, and the Skolra app has all of them.

JAMB Principles of Accounts 1999 questions and answers

1.
Appropriation Account
Kudu Wale
Interest on capital 750 550
Salaries 800 600
Share of profits 3,300 3,300
Determine the net profit of the partnership.
1. A
  ₦9,300
  Correct
2. B
  ₦8,000
3. C
  ₦6,600
4. D
  ₦7,900
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Answer: A
The appropriation account simply shares out the net profit of the partnership. The net profit is credited to the account, and everything on the debit side — interest on capital, partners' salaries and the residual share of profits — is an appropriation of that same profit. So to recover the net profit, add up every appropriation for both partners.
Interest on capital: 750 + 550 = ₦1,300
Salaries: 800 + 600 = ₦1,400
Share of profits: 3,300 + 3,300 = ₦6,600
Net profit = 1,300 + 1,400 + 6,600 = ₦9,300
You can check it the other way, by column: Kudu gets 750 + 800 + 3,300 = ₦4,850 and Wale gets 550 + 600 + 3,300 = ₦4,450, and 4,850 + 4,450 = ₦9,300. Same answer.
2.The difference between the factory cost of production and the prime cost of production is?
1. A
  the cost of raw materials consumed
2. B
  the direct labour and direct expenses
3. C
  the administrative and selling overheads
4. D
  the factory overhead cost
  Correct
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Answer: D
Remember how the manufacturing account is built up, step by step:
Prime cost = direct materials consumed + direct labour + direct (chargeable) expenses.
Factory (works) cost of production = prime cost + factory overheads, then adjusted for opening and closing work-in-progress.
So when you subtract prime cost from factory cost, what is left is the factory overhead cost - the indirect factory charges like factory rent and rates, factory power and lighting, depreciation of plant and machinery, indirect materials and the factory supervisor's salary. That is why the factory overhead cost is the correct answer.
3.The basic role of accounting is to?
1. A
  record only the cash receipts and payments of a business
2. B
  detect and prevent fraud committed by the staff
3. C
  determine the selling prices of goods and services
4. D
  provide financial information for decision making
  Correct
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Answer: D
Accounting is defined as the process of identifying, measuring, recording, classifying, summarising and communicating financial information so that users can make informed judgements and decisions. Notice where the definition ends - with communicating information for decision making. That final stage is the whole reason we keep the books at all, so providing financial information for decision making is the basic role of accounting.
4.Chibuike bought 36 notebooks at ₦10 each from John and was given a trade discount of 5%. In addition, he was offered 1% cash discount which he took advantage of. How much did Chibuike pay?
1. A
  ₦338.58
  Correct
2. B
  ₦342.00
3. C
  ₦356.40
4. D
  ₦338.40
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Answer: A
Start with the list price: 36 notebooks × ₦10 = ₦360.
Step 1 – trade discount first. Trade discount is a reduction off the list price given by one trader to another. It never appears in the ledger; it simply reduces the invoice figure.
5% of ₦360 = ₦18, so the invoice price = ₦360 − ₦18 = ₦342.
Step 2 – cash discount on the invoice price. Cash discount is the reward for paying promptly, and it is always calculated on the amount actually invoiced, not on the original list price.
1% of ₦342 = ₦3.42.
Amount paid = ₦342 − ₦3.42 = ₦338.58.
5.As part of the initial investment, a partner contributes office equipment that originally cost ₦20,000 and on which provision for depreciation of ₦12,500 had been recorded. If the partners agree on a valuation of ₦9,000 for the equipment, what amount should be debited to the office equipment account?
1. A
  ₦9,000
  Correct
2. B
  ₦20,000
3. C
  ₦7,500
4. D
  ₦12,500
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Answer: A
When a partner brings in an asset as part of his capital, the partnership opens a fresh set of books and brings that asset in at the value the partners agree on, not at whatever it stood at in the partner's own records.
The agreed valuation here is ₦9,000, so the entry in the partnership books is:
Dr Office equipment account ₦9,000
Cr Partner's capital account ₦9,000
Note carefully that the provision for depreciation of ₦12,500 does not follow the asset into the firm. Depreciation charged in the partner's old books relates to the use of the asset before the partnership existed; the firm starts the equipment afresh at ₦9,000 with a nil provision and depreciates it from there.
6.
A credit balance on a receipt and payments account indicates that the non-profit making organization?
1. A
  made a surplus of income over expenditure for the period
2. B
  has cash in hand at the close of the period
3. C
  has a bank overdraft at the close of the period
  Correct
4. D
  made a deficit of expenditure over income for the period
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Answer: C
Remember what a receipts and payments account really is: it is nothing more than a summarised cash book of the club or society. Every cash or bank receipt goes on the debit side, and every cash or bank payment goes on the credit side.
7.Depreciation on a particular piece of machinery was ₦2,700 during the fifth year of its service life and ₦4,050 during the sixth year. The logical explanation for this is that?
1. A
  the machinery is depreciated by the straight-line method over its service life
2. B
  the machinery is depreciated on the basis of usage and it worked more hours in the sixth year
  Correct
3. C
  the machinery is depreciated by the reducing balance method at a fixed percentage
4. D
  the estimated scrap value of the machinery was increased at the end of the fifth year
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Answer: B
Look carefully at what happened: the charge rose from ₦2,700 to ₦4,050 — an increase of ₦1,350, that is 4,050 ÷ 2,700 = 1.5 times the previous year's figure. Ask yourself which method of depreciation can produce a bigger charge in a later year.
Only a usage-based charge can. Under the machine-hour or units-of-output method, depreciation = rate per hour (or per unit) × the actual work the machine did that year. So if the machine ran 50% more hours in the sixth year, the charge is automatically 50% higher — exactly the ₦2,700 → ₦4,050 movement we see. That is the logical explanation.
8.A basic unifying concept in accounting implies that?
1. A
  The assets of a business are equal to its capital less its liabilities
2. B
  The business and its owner are treated as one and the same person
3. C
  Every transaction has a two-fold effect recorded as a debit and an equal credit
  Correct
4. D
  Profit is recognised only when cash from a sale is finally received
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Answer: C
The basic unifying concept in accounting is the dual aspect (duality) concept, and what it implies is that every transaction has a two-fold effect recorded as a debit and an equal credit. Every transaction has a receiving side and a giving side of the same value, so it is entered twice — debit one account, credit another with the same amount. This is exactly why the system is called double entry, why the trial balance agrees, and why the accounting equation Assets = Capital + Liabilities never goes out of balance. It "unifies" accounting because every other record — ledger, trial balance, final accounts — grows out of it.
9.The market price per ordinary share of a corporation listed on the stock exchange is most closely related to its?
1. A
  Earnings per share
  Correct
2. B
  Book value per share
3. C
  Par value per share
4. D
  Authorised share capital
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Answer: A
On the floor of the stock exchange, what an investor is really buying is the earning power of the share. That is why the market price is tied most closely to earnings per share. The syllabus gives you the link directly through the price-earnings ratio:
P/E ratio = Market price per share ÷ Earnings per share
so that Market price per share = P/E ratio × EPS.
When a quoted company's EPS rises, investors bid the price up; when EPS falls, the price sags. The relationship is immediate and observable.
10.Which of the following events increases a corporation's shareholders equity?
1. A
  Declaration of a cash dividend on ordinary shares
2. B
  A bonus issue made out of the general reserve
3. C
  Issue of 10% debenture stock for cash
4. D
  Issue of additional ordinary shares for cash at a premium
  Correct
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Answer: D
Shareholders' equity of a company is made up of the share capital, share premium, reserves and retained earnings. It goes up when the owners put fresh money in or the company earns profit, and it comes down when value is paid out to the owners or a loss is made.
Issuing additional ordinary shares for cash at a premium brings new money into the company from shareholders. The entry is Dr Bank, Cr Ordinary share capital and Cr Share premium. Both credits sit inside equity, so total shareholders' equity rises by the full amount received. That is a genuine increase.

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JAMB Principles of Accounts 1999 past questions

JAMB Principles of Accounts 1999 questions and answers

Practise all 50 questions we hold from the 1999 paper, on a timed CBT screen

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