eZine · Nigerian exams

Final accounts of a sole trader/proprietor

JAMB Financial Accounting topic guide with 2 practice questions.

What to revise

  • statement of profit or loss/income statement
  • statement of financial position
  • adjustments: provision for bad and doubtful debt
  • adjustments: provision for discounts
  • adjustments: provision for depreciation using straight-line and reducing balance methods
  • adjustments: accruals and prepayment

You should be able to

  • determine the cost of sales, gross profit and net profit of a sole trader
  • identify non-current assets, current assets, long-term liabilities, current liabilities and proprietor's capital
  • compute adjustable items on the related expenditure and income in the statement of profit or loss
  • differentiate between bad debts and provision for bad and doubtful debts

From JAMB's Financial Accounting syllabus official. Full syllabus →

eZine's published bank has 20 questions on this topic (counted 29 October 2026).

Practice questions

Question 1 · Final accounts of a sole trader/proprietor

A debt of ₦18,000 previously written off as bad was recovered in cash. The correct treatment is

Show answer and explanation

Answer: D. reinstate the debtor, then record the cash received; credit bad debts recovered to profit or loss

The debt is reinstated (debit debtor, credit bad debts recovered) and the cash receipt recorded (debit cash, credit debtor), so the recovery is income. It is not a new sale, it does not increase bad debts, and it is not part of the provision.

eZine practice question (original, teacher-reviewed)

Question 2 · Final accounts of a sole trader/proprietor

A delivery van costing ₦2,000,000 is depreciated at 20% per annum on the reducing balance method. The depreciation charge for year 3 is

Show answer and explanation

Answer: C. ₦256,000

Year 1: 20% × ₦2,000,000 = ₦400,000; NBV ₦1,600,000. Year 2: ₦320,000; NBV ₦1,280,000. Year 3: 20% × ₦1,280,000 = ₦256,000 (NBV after year 3 = ₦1,024,000). ₦400,000 is the straight-line style charge on cost; ₦320,000 is year 2; ₦204,800 is year 4.

eZine practice question (original, teacher-reviewed)

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