JAMB Principles of Accounts 2007 past questions

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

Ten questions from the 2007 JAMB Principles of Accounts paper, with answers and explanations. We hold 48 questions from this paper, and the Skolra app has all of them.

JAMB Principles of Accounts 2007 questions and answers

1.
Given:
Prepaid b/f.......................₦10 000
Cash paid during the year.........₦20 000
The amount to be charged to the profit and loss account is?
1. A
  ₦40 000
2. B
  ₦20 000
3. C
  ₦30 000
  Correct
4. D
  ₦10 000
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Answer: C
Handle this the way you treat any expense account with a prepayment. A prepayment brought forward is an amount that was paid in a previous year but belongs to this year. It opens as a debit (asset) balance in the expense account, and this year it is used up, so it must be added to what you paid in cash.
The rule:
Charge to Profit and Loss = Prepaid b/f + Cash paid during the year − Prepaid c/d
Working:
Prepaid b/f = ₦10 000
Cash paid during the year = ₦20 000
Prepaid c/d = nil (no closing prepayment is given)
₦10 000 + ₦20 000 − 0 = ₦30 000
2.The process whereby a cheque received by one person is given to another is known as?
1. A
  countermanding
2. B
  crossing
3. C
  endorsement
  Correct
4. D
  dishonouring
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Answer: C
When you receive a cheque made payable to you, you are the payee. If instead of paying it into your own account you decide to pass it on to somebody else to collect the money, you sign your name at the back of the cheque (often writing "Pay Musa Bello" above your signature). That act of signing the back of a cheque so that the right to the money passes to another person is called endorsement, and the cheque is then said to have been negotiated to a third party.
3.If Mr. Ajasin paid his creditors ₦5000 out of ₦20 000 owed, what would be the effect of this transaction on the accounting equation?
1. A
  Assets decrease by ₦5,000 and liabilities decrease by ₦5,000
  Correct
2. B
  Assets decrease by ₦15,000 and liabilities decrease by ₦15,000
3. C
  Assets decrease by ₦5,000 and capital decreases by ₦5,000
4. D
  Assets increase by ₦5,000 and liabilities decrease by ₦5,000
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Answer: A
Always start from the accounting equation: Assets = Capital + Liabilities. Ask yourself two questions only: which item came in or went out, and which item was settled?
Mr. Ajasin paid ₦5,000 cash to his creditors. The double entry is Debit Creditors ₦5,000, Credit Cash ₦5,000. Cash is an asset, so assets fall by ₦5,000. Creditors are a liability, so liabilities fall by ₦5,000. That is why assets decrease by ₦5,000 and liabilities decrease by ₦5,000 is the correct effect — both sides of the equation drop by the same amount and it stays balanced.
4.The gross profit disclosed in the branch stock adjustment account represents?
1. A
  The unrealised profit on the branch closing stock valued at selling price
2. B
  The profit realised on the goods actually sold by the branch during the period
  Correct
3. C
  The mark-up loaded on all the goods sent to the branch during the period
4. D
  The net profit of the branch after charging all branch operating expenses
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Answer: B
Under the stock and debtors system of branch accounting, the head office invoices goods to the branch at selling price. Because of that, every figure in the Branch Stock Account carries a hidden mark-up (loading), and it is the job of the Branch Stock Adjustment Account to collect that loading in one place.
5.Expense paid during the conversion of a partnership to a company are
1. A
  debited to the goodwill account of the new company
2. B
  debited to the partners' capital accounts in their profit-sharing ratio
3. C
  debited to the realisation account
  Correct
4. D
  credited to the realisation account
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Answer: C
When a partnership converts to a limited liability company, the partnership's books are closed exactly the way they are closed on dissolution — through a Realisation Account.
The entries run like this:
Dr Realisation, Cr Assets — with the book value of the assets handed over;
Dr Liabilities, Cr Realisation — with the liabilities the company takes over;
Dr Purchasing Company, Cr Realisation — with the purchase consideration;
Dr Realisation, Cr Cash/Bank — with the expenses paid on the conversion.
6.The amount of subscriptions accrued is reported in the balance sheet under?
1. A
  accumulated fund
2. B
  current liabilities
3. C
  current assets
  Correct
4. D
  fixed assets
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Answer: C
In a club or society, subscription is income. When we say subscription is accrued (you will also hear "subscription in arrears" or "outstanding subscription"), it means the income belongs to the current year but the members have not yet paid the money. The club is therefore owed that amount.
Anything owed to the organisation and expected to be collected within one year is a receivable, so it is shown on the assets side of the balance sheet under current assets (often written as "subscriptions in arrears" or "subscriptions receivable").
7.Journal proper is used in recording?
1. A
  all cash and bank receipts and payments of the business
2. B
  transactions such as credit purchase of fixed assets and correction of errors
  Correct
3. C
  goods returned to the business by its credit customers
4. D
  credit purchases of goods meant for resale in the business
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Answer: B
The journal proper (also called the general journal) is the residual book of original entry. Every other subsidiary book has one specific job, so whatever does not fit into any of them is entered in the journal proper.
Items normally passed through the journal proper include:
• opening and closing entries
• purchase or sale of fixed assets on credit (a motor van bought on credit is not a "purchase" for the purchases day book, because it is not goods for resale)
• correction of errors
• adjusting and transfer entries, and writing off bad debts
That is why the choice naming credit purchase of fixed assets and correction of errors is the right one.
8.Stock valuation is useful because it forms the sales department on the?
1. A
  quantity of goods available for sale
  Correct
2. B
  value of debts owed by credit customers
3. C
  amount of discount allowed to customers
4. D
  cost of goods sold during the period
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Answer: A
Stock valuation simply means putting a value on the goods that are still unsold at the end of the period, using the rule lower of cost and net realisable value. Once that exercise is done, the business knows precisely what merchandise is still lying in the store.
That is exactly the information the sales department needs, so the quantity of goods available for sale is the correct answer. The sales team cannot promise goods to customers, plan a promotion or tell the buyer what to re-order unless it knows what is on hand.
9.The fourth stage of the accounting information system is?
1. A
  Communicating the interpreted results to the various users
2. B
  Summarizing the classified data into a trial balance
3. C
  Classifying the recorded transactions into ledger accounts
4. D
  Interpreting the summarized financial data for decision making
  Correct
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Answer: D
Remember the definition you were taught: accounting is the art of recording, classifying and summarizing transactions in a significant manner and in terms of money, and interpreting the results. That definition already gives you the order in which the accounting information system works on data.
10.The federal government approved ₦140m to local governments W, X, Y and Z. The amount is to be shared on the basis of 40% equality, 35% population and 25% internal revenue generation. Calculate the share of local government W on equality?
1. A
  ₦56,000,000
2. B
  ₦14,000,000
  Correct
3. C
  ₦35,000,000
4. D
  ₦12,250,000
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Answer: B
Take the question in two clear steps: first find the size of the equality pool, then share that pool among the councils.
Step 1 - the equality pool. Only 40% of the approved sum is shared on equality:
40% x ₦140,000,000 = ₦56,000,000.
Step 2 - divide equally. "Equality" means every local government gets the same amount, and there are four of them (W, X, Y and Z):
₦56,000,000 ÷ 4 = ₦14,000,000.
So local government W receives ₦14,000,000 on the equality basis. Whatever else W gets from population (35%) or internal revenue generation (25%) is calculated separately and added later.

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JAMB Principles of Accounts 2007 past questions

JAMB Principles of Accounts 2007 questions and answers

Practise all 48 questions we hold from the 2007 paper, on a timed CBT screen

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