JAMB Principles of Accounts 2014 past questions

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

Ten questions from the 2014 JAMB Principles of Accounts paper, with answers and explanations. We hold 47 questions from this paper, and the Skolra app has all of them.

JAMB Principles of Accounts 2014 questions and answers

1. 1.The excess of sales over cost of goods sold is
   1. A
      gross profit
      Correct
   2. B
      turnover
   3. C
      working capital
   4. D
      net profit
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   Answer: A

   This is a definition straight from the Trading Account. In the trading account we bring in sales on one side and the cost of goods sold (opening stock + purchases − closing stock) on the other. Whatever sales exceed the cost of goods sold by is the gross profit.

   Sales − Cost of goods sold = Gross profit
   For example, if sales are ₦500,000 and cost of goods sold is ₦320,000, the gross profit is ₦180,000.

2. 2.Petty cash book records transactions on
   1. A
      small items of cash expenditure
      Correct
   2. B
      credit purchases of trading stock
   3. C
      goods returned by customers
   4. D
      the purchase of non-current assets
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   Answer: A

   The petty cash book is the book of prime entry kept by the petty cashier for the small, everyday cash payments of the business — postage stamps, taxi and bus fares, tea and sugar, cleaning materials, minor repairs. Such payments are too many and too small to clutter the main cash book, so they are entered and analysed in columns in the petty cash book, and only the column totals are posted to the ledger at the end of the period. That is why the correct completion is small items of cash expenditure. It is usually run on the imprest system: the petty cashier begins each period with a fixed float, and at the end he is reimbursed with exactly what he has spent, bringing the float back to the original figure.

3. 3.The formula for calculating depreciation using straight line method is
   1. A
      (Cost of asset − scrap value) ÷ estimated useful life
      Correct
   2. B
      (Cost of asset + scrap value) ÷ estimated useful life
   3. C
      Cost of asset ÷ (estimated useful life − scrap value)
   4. D
      Net book value × fixed percentage rate of depreciation
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   Answer: A

   The straight line method (also called the fixed instalment method) charges the same amount of depreciation every year throughout the life of the asset. To do that, you first find the part of the cost that will actually be used up, then share it equally over the years of use.

   Annual depreciation = (Cost of asset − Scrap value) ÷ Estimated useful life

4. 4.If goods were bought from Tanko at a cost price of #9,000 with a cash discount of 5%, how much will be paid assuming prompt payment was made?
   1. A
      ₦9,450
   2. B
      ₦8,550
      Correct
   3. C
      ₦8,100
   4. D
      ₦9,000
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   Answer: B

   A cash discount is the reward a supplier gives you for settling your account promptly. Because Tanko's goods were paid for promptly, the discount is earned and is deducted from the invoice amount.

   Step 1 – find the discount:
   5% × ₦9,000 = 5/100 × ₦9,000 = ₦450

   Step 2 – find the amount paid:
   ₦9,000 − ₦450 = ₦8,550

   In the books of the buyer the entry is: debit Tanko (creditor) ₦9,000, credit Cash/Bank ₦8,550 and credit Discount Received ₦450. The discount received is an income to the buyer, which is why the cash leaving the business is only ₦8,550.

5. 5.The account of government into which all monies are received and from which all expenditures are disbursed is the
   1. A
      Development Fund
   2. B
      Contingencies Fund
   3. C
      Federation Account
   4. D
      Consolidated Revenue Fund
      Correct
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   Answer: D

   The answer is the Consolidated Revenue Fund (CRF). Think of it as government's main "current account". Section 80(1) of the 1999 Constitution says that all revenues and other moneys raised or received by the Federation, except those specifically payable into another fund, must be paid into one Consolidated Revenue Fund. Sections 80(2)-(4) then say no money may be withdrawn from it except to meet expenditure charged upon it by the Constitution or authorised by an Appropriation Act. So it is the one fund that both receives all monies and pays out all expenditure - exactly what the question describes.

6. 6.

   2/3 Purchases 900 books at #1,000 each

   4/3 Purchases 590 books at ₦950 each

   15/3 Sales 300 books at #900 eachCalculate the cost of goods available for sale using LIFO

   1. A
      ₦1,160,500
   2. B
      ₦1,175,500
   3. C
      ₦1,460,500
      Correct
   4. D
      ₦1,490,000
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   Answer: C

   Cost of goods available for sale = opening stock + purchases (at cost). Nothing is sold out of this figure yet — it is simply everything you had on hand to sell during the period.

   Here no opening stock is given, so we take the two purchases only:
   2/3: 900 × ₦1,000 = ₦900,000
   4/3: 590 × ₦950 = ₦560,500
   Total = ₦1,460,500

7. 7.Where partnership is converted into a limited liability company, current account balances of partners are transferred to a
   1. A
      revaluation account
   2. B
      profit and loss appropriation account
   3. C
      capital account
      Correct
   4. D
      realisation account
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   Answer: C

   When a partnership is converted into a limited liability company, the partnership books are closed off completely, just as in a dissolution. A limited liability company has shareholders, not partners, so there is no room for a current account in the new set of books. Each partner's current account balance is therefore closed and transferred to that partner's capital account.

8. 8.

   1. Cash sales

   11. Cash purchases

   111. Cash discount allowed

   1V. Cash payment

   V. Cash receiptsWhich of the following are recorded on the debit side of the cash book

   1. A
      II, IV and V
   2. B
      I, II and IV
   3. C
      II, III and IV
   4. D
      I, III and V
      Correct
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   Answer: D

   Always remember the golden rule of the cash book: debit side = money IN (receipts), credit side = money OUT (payments). The cash book is simply the cash and bank account lifted out of the ledger, so it obeys "debit what comes in, credit what goes out".

9. 9.One of the the differences between bookkeeping and accounting is that the former
   1. A
      is limited to recording transactions while the latter analyses and interprets them
      Correct
   2. B
      is performed by chartered accountants while the latter is handled by clerks
   3. C
      interprets financial data while the latter merely records daily transactions
   4. D
      prepares the final accounts while the latter posts entries into the ledger
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   Answer: A

   In the stem, "the former" is bookkeeping and "the latter" is accounting, because bookkeeping is named first. Take note of that before you even look at the choices — half of the marks lost on this question are lost by candidates who mix up former and latter.

10. 10.The details of the share capital which a company is authorized to issue is contained in the
    1. A
       prospectus
    2. B
       certificate of incorporation
    3. C
       articles of association
    4. D
       memorandum of association
       Correct
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    Answer: D

    When a company is being registered in Nigeria, the promoters deliver a memorandum of association to the Corporate Affairs Commission. The memorandum is the company's external constitution and it must contain the capital clause, which states the amount of share capital the company is registered to issue and how that capital is divided into shares of a fixed amount — for example, "the share capital of the company is ₦10,000,000 divided into 10,000,000 ordinary shares of ₦1 each". That is exactly the detail the question is asking about, so the memorandum of association is correct.

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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