JAMB Principles of Accounts 2005 past questions

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

Ten questions from the 2005 JAMB Principles of Accounts paper, with answers and explanations. We hold 18 questions from this paper, and the Skolra app has all of them.

JAMB Principles of Accounts 2005 questions and answers

1.A company incurred ₦21 000 in running its four departments, namely J,K,L and M with a corresponding number of employees as 1500, 2000, 3000 and 500 respectively. What is the share of department K?
1. A
  ₦4,500
2. B
  ₦5,250
3. C
  ₦9,000
4. D
  ₦6,000
  Correct
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Answer: D
This is a straight apportionment of overhead using number of employees as the basis. Whenever a cost is shared by headcount, first find the total headcount, then the cost carried by one employee.
Step 1 - Total employees:
1,500 + 2,000 + 3,000 + 500 = 7,000 employees
Step 2 - Rate per employee:
₦21,000 ÷ 7,000 = ₦3 per employee
Step 3 - Department K:
2,000 employees × ₦3 = ₦6,000
You can prove the working by sharing the whole cost: J = 1,500 × ₦3 = ₦4,500; K = ₦6,000; L = 3,000 × ₦3 = ₦9,000; M = 500 × ₦3 = ₦1,500. These add back to ₦21,000, so the apportionment is complete.
2.The not-for-profit-making organizations generate their income mainly from?
1. A
  Interest earned on investments held
2. B
  Donations and legacies from the public
3. C
  Profits made from trading activities
4. D
  Subscriptions received from members
  Correct
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Answer: D
A not-for-profit-making organisation is a club, society or association — a social club, an old students’ association, a professional body. It is not set up to buy and sell for gain; it is set up to serve its members. That is why it prepares a Receipts and Payments Account and an Income and Expenditure Account instead of a Trading, Profit and Loss Account, and why its balancing figure is called surplus or deficit rather than profit or loss.
3.Gamji Memorial Club carried out an activity which yield a profit of ₦10 000. This amount is to be transferred to the?
1. A
  Income and expenditure account
  Correct
2. B
  Accumulated fund account
3. C
  Subscription in arrears account
4. D
  Receipts and payments account
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Answer: A
Gamji Memorial Club is a non-trading organisation, so it does not prepare a trading, profit and loss account for its general activities. Instead it prepares a Receipts and Payments Account, an Income and Expenditure Account and a Balance Sheet.
When such a club runs a special money-making activity — a dance, a bar, a fundraising sale — a separate activity or trading account is opened to work out the profit or loss on that one activity. That profit of ₦10,000 is then treated as ordinary income of the club, so it is transferred to the credit side of the Income and Expenditure Account, where it joins subscriptions, donations and other incomes and is set against the club's running expenses.
4.
A company paid cash in redemption of ₦10,000 debenture.
The accounting entry to record this will be to debit?
1. A
  Debenture redemption reserve account with ₦10,000
2. B
  Debenture account with ₦10,000
  Correct
3. C
  Debenture interest account with ₦10,000
4. D
  Cash account with ₦10,000
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Answer: B
Always ask yourself two questions: what did the company give out? and what did the company settle? Here the company gave out cash and settled a debt.
A debenture is a long-term loan taken by the company, so the Debenture account is a liability sitting on the credit side with a balance of ₦10,000. To redeem it means to pay it back, and once it is paid back the liability must disappear from the books. Remember the golden rule: a liability increases on the credit side and decreases on the debit side. So to cancel the ₦10,000 owed, you debit the Debenture account with ₦10,000. That is why debiting the debenture account is the correct treatment.
5.In reconciling the branch and head office accounts, remittance in transit in the branch books is treated as a?
1. A
  Debit in the head office current account
  Correct
2. B
  Credit in the branch current account
3. C
  Debit in the branch current account
4. D
  Credit in the head office current account
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Answer: A
Remember how the two sets of books are kept. The branch keeps a Head Office Current Account in its own ledger, while the head office keeps a Branch Current Account in its ledger. These are reciprocal accounts: they should be equal but on opposite sides, and when they disagree it is usually because of goods or cash in transit.
6.Departmental accounts are prepared to aid the comparison of the?
1. A
  trading performance of the various departments of the business
  Correct
2. B
  current year's trading results with those of the previous years
3. C
  results of the business with those of other firms in the same industry
4. D
  records of the head office with those kept at the branches
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Answer: A
When a business trades through several departments under one roof, it prepares a columnar trading and profit and loss account - one column for each department. Sales, purchases, opening and closing stock and any expense that belongs directly to a department are entered in that department's column, while joint expenses such as rent, lighting and the manager's salary are apportioned on a fair basis (floor area, sales value, number of employees, and so on).
7.The head office of Emeka Stores maintains the financial accounts of all its branches. The branch store account in the head office serves as the branch?
1. A
  appropriation account
2. B
  profit and loss account
3. C
  trading account
  Correct
4. D
  current account
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Answer: C
Because the head office of Emeka Stores keeps the books of all the branches, this is the centralised system of branch accounting. Under it the head office opens a Branch Stock (Store) Account, a Branch Debtors Account, a Branch Expenses Account and a Goods Sent to Branch Account for each branch.
Now look carefully at what enters the branch store account:
Debit side: opening stock at the branch and goods sent to the branch (less returns to head office).
Credit side: cash sales, credit sales and closing stock carried down.
8.When assets are realized during a partnership dissolution, the entries for the proceeds are to debit?
1. A
  the partners' capital accounts and credit the realisation account
2. B
  the realisation account and credit the asset account
3. C
  the cash account and credit the realisation account
  Correct
4. D
  the realisation account and credit the cash account
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Answer: C
On dissolution, a Realisation Account is opened to close off the firm's assets and find the profit or loss on winding up.
Follow the money. When an asset is realised (sold), cash comes into the business. An increase in cash is always a debit, and the account that gave up the value — the Realisation Account — is credited. So the entry for the proceeds is: Debit Cash (or Bank) Account, Credit Realisation Account.
9.Profit or loss in a partnership is usually arrived at after deducting from gross profit all expenses including?
1. A
  interest charged on the partners' drawings
2. B
  interest on loans advanced to the firm by partners
  Correct
3. C
  salaries and commission due to the partners
4. D
  interest on partners' capital contributions
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Answer: B
This question is testing one thing only: the difference between a charge against profit and an appropriation of profit.
A partnership prepares its final accounts in three stages:
1. Trading Account → gives gross profit.
2. Profit and Loss Account → all business expenses are deducted from gross profit to arrive at the net profit or loss.
3. Profit and Loss Appropriation Account → the net profit is then shared among the partners.
10.
A component of an overhead manufacturing cost is
1. A
  wages of machine operators
2. B
  depreciation of factory plant and machinery
  Correct
3. C
  salary of the sales manager
4. D
  cost of raw materials consumed
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Answer: B
Manufacturing (factory) overhead means the indirect costs of running the factory — costs you cannot trace to a single unit of product. Examples are indirect materials, indirect wages such as the foreman's or storekeeper's pay, factory rent and rates, factory power and lighting, repairs to plant, and depreciation of factory plant and machinery. That is why depreciation of factory plant and machinery is the correct component here.
Remember the layout of the manufacturing account:
Direct materials + Direct wages + Direct expenses = Prime cost
Prime cost + Factory overhead = Cost of production

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JAMB Principles of Accounts 2005 past questions

JAMB Principles of Accounts 2005 questions and answers

Practise all 18 questions we hold from the 2005 paper, on a timed CBT screen

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