JAMB Principles of Accounts 2021 past questions

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

Ten questions from the 2021 JAMB Principles of Accounts paper, with answers and explanations. We hold 37 questions from this paper, and the Skolra app has all of them.

JAMB Principles of Accounts 2021 questions and answers

1. 1.

   The ordinary shareholders enjoy the following right except the right to

   1. A
      vote at the annual general meeting of the company
   2. B
      transfer his shares to another person
   3. C
      receive a fixed rate of dividend every year
      Correct
   4. D
      share in the surplus assets of the company on winding up
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   Answer: C

   The question asks for the one thing that is NOT a right of an ordinary shareholder.

   Ordinary (equity) shareholders are the true owners and the risk-bearers of the company. Their dividend is variable, not fixed. Directors recommend it out of the profit available, and it is approved at the annual general meeting. In a bad year the company may declare no ordinary dividend at all. So the right to receive a fixed rate of dividend every year is the exception, and it is the correct answer. A fixed rate belongs to preference shareholders (for example, 8% preference shares), just as a fixed rate of interest belongs to debenture holders.

2. 2.

   The accounting method that reports incomes when earned and expenses when incurred is called

   1. A
      cash basis
   2. B
      accrual basis
      Correct
   3. C
      commitment basis
   4. D
      modified cash basis
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   Answer: B

   The key word in the question is "when earned" and "when incurred" - not "when received" or "when paid". Any basis that ignores the movement of cash and looks instead at the period the revenue was earned and the expense was incurred is the accrual basis of accounting. Under this basis, if you sell goods on credit in December 2021 but the customer pays you in January 2022, the income still belongs to 2021. In the same way, rent owing at year end (accrued expense) is charged to that year even though no naira has left the business yet. This is the basis required by the accounting standards for the financial statements of companies.

3. 3.

   Capital and revenue expenditures of government are usually accounted for under funds which include

   1. A
      consolidated revenue and development funds
      Correct
   2. B
      contingencies and trust funds
   3. C
      general and capital reserve funds
   4. D
      sinking and redemption funds
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   Answer: A

   Government accounting in Nigeria is fund accounting: public money is kept in separate funds, and each class of expenditure is charged to the fund that owns it. The 1999 Constitution (sections 80–83) and the Finance (Control and Management) Act set up these funds.

4. 4.

   Stationery which will be used over a long period of time is usually recorded as an expense instead of an asset. This concept is called

   1. A
      prudence concept
   2. B
      materiality concept
      Correct
   3. C
      consistency concept
   4. D
      going concern concept
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   Answer: B

   Strictly speaking, stationery that will be used over a long period gives benefit for more than one accounting period, so it qualifies as an asset. But the amount involved is so small that treating it as an asset, and then depreciating it year after year, would not change the decision of anybody reading the accounts. Because the item is insignificant in amount, it is simply written off as an expense in the year of purchase. That short cut is exactly what the materiality concept permits: only items big enough to influence the users of the financial statements need separate, detailed treatment.

   So the correct concept here is materiality.

5. 5.

   The two legally recognized professional accounting bodies in Nigeria are the

   1. A
      Institute of Chartered Accountants of Nigeria and Association of Chartered Certified Accountants
   2. B
      Association of National Accountants of Nigeria and Nigerian Accounting Standards Board
   3. C
      Institute of Chartered Accountants of Nigeria and Association of National Accountants of Nigeria
      Correct
   4. D
      Institute of Chartered Accountants of Nigeria and Chartered Institute of Taxation of Nigeria
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   Answer: C

   The key word in the question is legally recognized. A professional accounting body is legally recognized in Nigeria only if it was set up by an Act of the National Assembly that empowers it to train, examine and license accountants. Only two bodies pass that test:

   1. Institute of Chartered Accountants of Nigeria (ICAN) — created by the ICAN Act No. 15 of 1965.
   2. Association of National Accountants of Nigeria (ANAN) — created by Decree (now Act) No. 76 of 1993.

   So the pairing of the Institute of Chartered Accountants of Nigeria and the Association of National Accountants of Nigeria is the correct one.

   Now see where the other choices go wrong:

   Pairing ICAN with the Chartered Institute of Taxation of Nigeria is tempting because CITN is indeed a chartered Nigerian body with its own Act. But CITN is a taxation body, not an accounting body — it licenses tax practitioners, not accountants.

6. 6.

   Sales ledger control account contains the total amount in respect of

   1. A
      credit sales, returns inwards and cash received from debtors
      Correct
   2. B
      credit purchases, returns outwards and cash paid to creditors
   3. C
      cash sales, carriage outwards and discount received
   4. D
      opening stock, net purchases and closing stock
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   Answer: A

   The sales ledger control account (also called the total debtors account) is a summary account kept in the general ledger to check the accuracy of the sales ledger. Every figure posted into it is a total taken from a book of prime entry, and every one of those totals relates to trade debtors.

   Its usual layout is:
   Debit: opening debtors balance, total credit sales (sales day book), dishonoured cheques, interest charged on overdue accounts.
   Credit: total returns inwards (sales returns day book), total cash/cheques received from debtors, discount allowed, bad debts written off, contra/set-off, closing debtors balance.

7. 7.

   Given:
   Lankoh Company Ltd
   ₦
   Stock 3,600,000
   Cash at hand 800,000
   Cash in bank 2,400,000
   Debtors 580,000
   Trade creditors 920,000
   Bank overdraft 200,000
   Tax liabilities 600,000
   Salary owed to staff 180,000

   What is the working capital?

   1. A
      ₦5,680,000
   2. B
      ₦7,380,000
   3. C
      ₦5,480,000
      Correct
   4. D
      ₦1,880,000
   Show answerHide answer

   Answer: C

   Working capital is simply Current Assets − Current Liabilities, so the first job is to sort the list into the two groups.

   Current assets:
   Stock ₦3,600,000
   Cash at hand ₦800,000
   Cash in bank ₦2,400,000
   Debtors ₦580,000
   Total = ₦7,380,000

   Current liabilities:
   Trade creditors ₦920,000
   Bank overdraft ₦200,000
   Tax liabilities ₦600,000
   Salary owed to staff ₦180,000
   Total = ₦1,900,000

   Working capital = ₦7,380,000 − ₦1,900,000 = ₦5,480,000.

8. 8.

   Given: i. The memorandum of association of the company ii. The article of association of the company iii. The incorporation documents.

   From the above, which of the following is delivered to the registrar of companies for incorporation?

   1. A
      i and ii only
   2. B
      i and iii only
   3. C
      ii and iii only
   4. D
      i, ii and iii
      Correct
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   Answer: D

   To register a company in Nigeria, the promoters send a complete package of documents to the registrar of companies at the Corporate Affairs Commission (CAC), so i, ii and iii are all delivered.

9. 9.

   In a departmental accounting system, which of the following expenses will most likely be apportioned on the basis of turnover

   1. A
      Canteen and welfare expenses
   2. B
      Advertising and sales promotion
      Correct
   3. C
      Rent and rates of the building
   4. D
      Depreciation of plant and machinery
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   Answer: B

   In departmental accounts, joint expenses are shared out using the basis that best explains why the cost was incurred. Selling and distribution costs are driven by how much each department sells, so they are apportioned on the basis of turnover (sales).

   Advertising and sales promotion is exactly that kind of cost. The department that records the higher sales is taken to have benefited more from the adverts, so it carries the bigger share. Other expenses in this same family are carriage outwards, discount allowed, bad debts and salesmen's commission.

   So master the pairings: area for space costs, asset value for machine costs, headcount for staff costs, and turnover for selling costs.

10. 10.

    The principle of double entry system ensures

    1. A
       that the assets of the business always exceed its liabilities
    2. B
       that all errors committed in the books are automatically detected
    3. C
       that every debit entry has a corresponding credit entry of equal amount
       Correct
    4. D
       that the business earns a profit at the end of each accounting period
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    Answer: C

    Every business transaction has two aspects: a receiving aspect and a giving aspect. The double entry principle says you must record both — one account is debited and another account is credited with the same amount. So the option saying every debit entry has a corresponding credit entry of equal amount is the correct one.

    For example, if you buy goods for cash of ₦50,000, you debit Purchases ₦50,000 and credit Cash ₦50,000. Because this happens for every single entry, total debits must equal total credits, and that is why the trial balance agrees and the books show arithmetical accuracy.

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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