eZine · Nigerian exams
Introduction to company accounts
JAMB Financial Accounting topic guide with 2 practice questions.
What to revise
- formation and classification of companies
- issue of shares and debentures
- final accounts of companies: statement of profit or loss, statement of financial position
- accounting ratios
- distinction between capital and revenue reserves
You should be able to
- differentiate between types of companies
- identify the procedures of treating the issue of shares and debentures
- compute the elements of final accounts of companies
- compute and interpret accounting ratios such as current, acid test and stock turnover
From JAMB's Financial Accounting syllabus official. Full syllabus →
eZine's published bank has 15 questions on this topic (counted 29 October 2026).
Practice questions
Question 1 · Introduction to company accounts
In the published statement of financial position of a company, proposed dividends that have not been declared before the year end are
Show answer and explanation
Answer: D. disclosed only in the notes
Under IAS 10, dividends proposed after the reporting date are not a liability at that date; they are disclosed in notes. Showing them as a liability follows old practice; they are not share capital and do not reduce assets.
eZine practice question (original, teacher-reviewed)
Question 2 · Introduction to company accounts
Sales ₦4,500,000; gross profit ₦1,350,000. The gross profit margin is
Show answer and explanation
Answer: B. 30%
GP margin = ₦1,350,000 ÷ ₦4,500,000 × 100 = 30%. 42.9% is the mark-up on cost (₦1,350,000 ÷ ₦3,150,000); 70% is the cost of sales percentage; 3.3% inverts the ratio and misplaces the decimal.
eZine practice question (original, teacher-reviewed)
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