JAMB Principles of Accounts 2012 past questions

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

Ten questions from the 2012 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 2012 questions and answers

1.Akirika bought a motor van for his business by cash. The entries are to debit
1. A
  motor van account and credit cash account
  Correct
2. B
  purchases account and credit cash account
3. C
  motor van account and credit capital account
4. D
  cash account and credit motor van account
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Answer: A
Take the transaction one leg at a time, the way double entry works: debit what comes in, credit what goes out.
A motor van has come into Akirika's business, so the asset increases and we debit the Motor Van account. Cash has left the business to pay for it, so that asset decreases and we credit the Cash account. That is why debiting motor van account and crediting cash account is the correct pair.
Debiting cash and crediting motor van is simply the entry written the wrong way round — it would mean the business sold the van and received cash, which is the opposite of what happened.
2.
Purchasers - #44,880
Sales - #85,850
Trade creditors - #12,250
Trade debtors - #24,000
Accrued expenses - # 350
Prepaid expenses - # 700
Stock 1/1/2006 - #25,120
Stock 31/12/2006 - #27,840Calculate the acid test ration
1. A
  2.02 : 1
2. B
  4.17 : 1
3. C
  1.90 : 1
4. D
  1.96 : 1
  Correct
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Answer: D
The acid test (quick) ratio measures how well a business can settle its short-term debts without having to sell its stock, because stock is the slowest current asset to turn into cash.
Acid test ratio = (Current assets − Closing stock) ÷ Current liabilities
First pick out only the balance sheet items. Purchases (₦44,880), sales (₦85,850) and opening stock (₦25,120) belong to the trading account, so they are ignored here.
Quick assets:
Trade debtors ₦24,000
Prepaid expenses ₦700
Total = ₦24,700 (closing stock of ₦27,840 is deliberately left out)
Current liabilities:
Trade creditors ₦12,250
Accrued expenses ₦350
Total = ₦12,600
3.Which of the following is a source of revenue to the federation account?
1. A
  Tenement rates on landed property
2. B
  Pay-as-you-earn tax of state civil servants
3. C
  Petroleum profit tax
  Correct
4. D
  Market and motor park levies
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Answer: C
The Federation Account is created by Section 162 of the 1999 Constitution. Into it goes all revenue collected by the Government of the Federation, which is then shared among the Federal, State and Local Governments using the sharing formula of the Revenue Mobilisation Allocation and Fiscal Commission.
So the test is simple: who collects it? If it is a federally collected revenue, it enters the Federation Account. Petroleum profit tax is assessed and collected by the Federal Inland Revenue Service from oil-producing companies, so it goes straight into the Federation Account. Other members of that same family are mining rents and royalties, companies income tax, and import and excise duties.
4.In the head office ledger, the value of goods sent to the branch are
1. A
  debited to the branch account and credited to the goods sent to branch account
  Correct
2. B
  debited to the branch account and credited to the head office current account
3. C
  credited to the branch account and debited to the goods sent to branch account
4. D
  debited to the purchases account and credited to the branch account
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Answer: A
When the head office sends goods to its branch, that is not a sale — it is simply moving stock from one arm of the same business to another. So in the head office ledger the entry is Dr Branch Account, Cr Goods Sent to Branch Account.
5.Ngozi and Musa with a capital of #30,000 each decide to admit Mary into the partnership business with a capital of #20,000 and goodwill #15,000.If the profits and losses are to be shared equally, the journal entries to record goodwill are
1. A
  Debit goodwill account ₦15,000; credit Ngozi's capital account ₦7,500 and Musa's capital account ₦7,500
  Correct
2. B
  Debit Ngozi's capital account ₦7,500 and Musa's capital account ₦7,500; credit goodwill account ₦15,000
3. C
  Debit Mary's capital account ₦15,000; credit Ngozi's capital account ₦7,500 and Musa's capital account ₦7,500
4. D
  Debit goodwill account ₦15,000; credit Ngozi's, Musa's and Mary's capital accounts ₦5,000 each
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Answer: A
Remember the golden rule of admission: goodwill earned before a new partner joins belongs to the old partners alone. Mary is only now coming in, so she cannot share in goodwill that Ngozi and Musa built up.
To record (raise) goodwill in the books, goodwill is brought in as an asset and the value is credited to the old partners in their old profit-sharing ratio. Ngozi and Musa each had capital of ₦30,000, so their old ratio is 1 : 1.
Ngozi: ₦15,000 × 1/2 = ₦7,500
Musa: ₦15,000 × 1/2 = ₦7,500
So the journal is: Dr Goodwill account ₦15,000; Cr Ngozi's capital ₦7,500 and Cr Musa's capital ₦7,500. Mary's capital account stays at ₦20,000.
6.
Purchasers - #44,880
Sales - #85,850
Trade creditors - #12,250
Trade debtors - #24,000
Accrued expenses - # 350
Prepaid expenses - # 700
Stock 1/1/2006 - #25,120
Stock 31/12/2006 - #27,840Determine the number of times stock was turned over during the period to the nearest figure
1. A
  3 times
2. B
  1 time
3. C
  2 times
  Correct
4. D
  4 times
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Answer: C
Rate of stock turnover = Cost of goods sold ÷ Average stock. Note carefully that it is cost of sales, not sales, that goes on top, because stock is carried at cost.
Step 1 – Cost of goods sold:
Opening stock ₦25,120 + Purchases ₦44,880 = ₦70,000
Less Closing stock ₦27,840
Cost of goods sold = ₦42,160
Step 2 – Average stock:
(₦25,120 + ₦27,840) ÷ 2 = ₦52,960 ÷ 2 = ₦26,480
Step 3 – Turnover:
₦42,160 ÷ ₦26,480 = 1.59 times, which to the nearest whole figure is 2 times.
7.The main advantage of a departmental account is that its
1. A
  gross profit is computed for the business as a whole
2. B
  assets and liabilities are shown separately for each department
3. C
  profit or loss is determined for each department separately
  Correct
4. D
  indirect expenses are apportioned equally among the departments
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Answer: C
A departmental account is simply a trading and profit and loss account prepared in columnar form, with one column for each department of the business. Sales, purchases, opening and closing stock and any expense that clearly belongs to a department are traced straight to that department's column, while joint expenses are apportioned across the columns.
8.The capital of a sole trader can be increased by
1. A
  the drawings of cash and goods by the owner
2. B
  an increase in the creditors of the business
3. C
  the net profit earned during the trading period
  Correct
4. D
  the net loss suffered during the trading period
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Answer: C
Always start from the capital account movement of a sole trader:
Closing capital = Opening capital + Capital introduced + Net profit − Drawings − Net loss
Anything credited to the capital account increases it; anything debited to it reduces it. Profit belongs to the owner, so at the end of the year the net profit earned during the trading period is transferred from the profit and loss account and credited to capital. That is why capital rises — that, or fresh money the owner brings in.
9.In manufacturing accounts, finance expenses are charged to the
1. A
  trading account
2. B
  profit and loss account
  Correct
3. C
  manufacturing account
4. D
  appropriation account
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Answer: B
Remember the order in which a manufacturer's final accounts are prepared: Manufacturing account (prime cost plus factory overheads, adjusted for work-in-progress, gives cost of production) → Trading account (cost of production and stocks of finished goods give cost of sales, and sales less cost of sales gives gross profit) → Profit and Loss account (gross profit less administrative, selling and distribution, and finance expenses gives net profit) → Appropriation account (sharing out the net profit).
10.The basis upon which assets of an organization is valued is the
1. A
  realisation concept
2. B
  prudence concept
3. C
  going concern concept
  Correct
4. D
  money measurement concept
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Answer: C
The answer is the going concern concept.
This concept assumes that the business will continue in operational existence for the foreseeable future — it is not about to close down or be sold off. Because of that assumption, the assets in the balance sheet are valued at cost less accumulated depreciation (their net book value), and the cost is spread over the years the asset will be used. A delivery van bought for ₦4,000,000 is shown at ₦4,000,000 less the depreciation written off so far, not at what it would fetch if you rushed it to the market today.

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JAMB Principles of Accounts 2012 past questions

JAMB Principles of Accounts 2012 questions and answers

Practise all 46 questions we hold from the 2012 paper, on a timed CBT screen

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