Final Accounts of a Sole Trader: JAMB Principles of Accounts Questions, Answers & Notes

What Final Accounts of a Sole Trader covers in the JAMB Principles of Accounts syllabus

Final accounts are prepared at the end of a trading period to show performance and position. The trading account finds gross profit = net sales − cost of goods sold (where cost of goods sold = opening stock + purchases − closing stock). The profit and loss account finds net profit = gross profit + other incomes − expenses (depreciation — the fall in a fixed asset's value — is charged here as an expense). The balance sheet shows the financial position at a date, based on Assets = Capital + Liabilities: fixed/non-current assets (long-lasting — buildings, machinery), current assets (cash, stock, debtors), current liabilities (creditors, overdraft, due within a year) and long-term liabilities. Net profit is added to capital, while drawings (owner's withdrawals) and net loss are deducted; closing stock appears as a current asset.

For Final Accounts of a Sole Trader, JAMB expects you to be able to:

• Prepare the trading account (gross profit) and profit and loss account (net profit)
• Prepare the balance sheet with fixed/current assets and liabilities
• Handle drawings, depreciation, closing stock and the accounting equation

Key facts & revision notes: Final Accounts of a Sole Trader

These are the recurring points our Final Accounts of a Sole Trader questions test — revise them until each feels automatic, then practise the questions above to lock them in.

• Final accounts are prepared at the end of a trading period (usually a year) to show the profit/loss and financial position.
• The trading account shows the gross profit (or gross loss).
• Gross profit = net sales (turnover) − cost of goods sold.
• Cost of goods sold = opening stock + purchases − closing stock.
• The profit and loss account shows the net profit (or net loss) after deducting expenses from gross profit.
• Net profit = gross profit + other incomes − expenses.
• The balance sheet shows the assets, liabilities and capital at a particular date.
• Fixed (non-current) assets are long-lasting and used in the business (e.g.
• land, buildings, machinery).
• Current assets are cash or items easily converted to cash within a year (stock, debtors, cash).
• Current liabilities are debts due within one year (e.g.
• creditors, bank overdraft).
• Drawings are amounts (cash or goods) the owner takes out for personal use; they reduce capital.
• Drawings are deducted from capital (along with net loss) in the balance sheet.
• Net profit is added to capital; net loss and drawings are deducted.
• Gross profit = sales − cost of goods sold = 100,000 − 60,000 = #40,000.
• Net profit = gross profit − expenses = 40,000 − 15,000 = #25,000.
• Depreciation is the reduction in the value of a fixed asset over its useful life.
• Depreciation is charged as an expense in the profit and loss account.
• Closing stock reduces cost of goods sold in the trading account and appears as a current asset in the balance sheet.
• The balance sheet reflects the accounting equation: Assets = Capital + Liabilities.
• Final accounts show the profit or loss (performance) and the financial position of the business.

Worked examples

Three Final Accounts of a Sole Trader questions with the answer and a short explanation, so you can see how the topic is set before you practise the full set.

How Final Accounts of a Sole Trader is tested in JAMB Principles of Accounts

Our Final Accounts of a Sole Trader bank holds 20 questions (5 medium, 15 hard). JAMB Principles of Accounts typically returns to Final Accounts of a Sole Trader year after year, so steady practice on this topic is high-value revision. Questions are multiple-choice with four options, and at UTME pace you get roughly 40 seconds each — which is why timed practice matters.

How to answer Final Accounts of a Sole Trader questions

Work the stem first and predict the answer before you look at the options; then eliminate the ones that contradict the key facts above. Watch for “which is not…”, “all of the above” and “except” style stems, which are where rushed candidates lose easy marks on Final Accounts of a Sole Trader. If a calculation or a precise definition is involved, work it from first principles rather than guessing from a half-remembered rule. When two options look right, re-read the stem for the qualifier that separates them — JAMB rarely repeats an option by accident. If you are still unsure, eliminate the two weakest choices to lift your odds, flag the question, and move on; never burn a full minute on one Principles of Accounts item when the exam gives you about forty seconds each. Then come back to flagged questions with whatever time remains. The single most reliable way to get faster at Final Accounts of a Sole Trader is repeated timed practice, so use the button above until the recurring patterns feel automatic.

Common mistakes to avoid in Final Accounts of a Sole Trader

The errors that cost marks on Final Accounts of a Sole Trader are usually careless rather than conceptual: misreading a negative stem, confusing two similar terms, or rushing a definition you actually know. Candidates also over-rely on “expo” and last-minute cramming instead of understanding the topic — which fails the moment JAMB rephrases a familiar idea. Treat every option as a claim to be checked against the facts above, keep your working tidy for any calculation, and don’t change a considered answer on a hunch. Above all, revise Final Accounts of a Sole Trader actively by answering questions, not just by re-reading notes — recall under time is what the exam rewards.

Frequently asked questions

Is Final Accounts of a Sole Trader part of the JAMB Principles of Accounts syllabus?

Yes. Final Accounts of a Sole Trader is a recognised topic in the JAMB Principles of Accounts syllabus, covering prepare the trading account (gross profit) and profit and loss account (net profit). You should be able to recall its key facts and apply them to multiple-choice questions.

How many Final Accounts of a Sole Trader questions can I practise on Belmadeng?

There are 20 original, JAMB-standard Final Accounts of a Sole Trader questions in our free bank, each with the correct answer and a worked explanation. You can practise them untimed or as a timed test.

What are the most important points to know about Final Accounts of a Sole Trader?

Final accounts are prepared at the end of a trading period to show performance and position. The trading account finds gross profit = net sales − cost of goods sold (where cost of goods sold = opening stock + purchases − closing stock). The profit and loss account finds net profit = gross profit + o…

How do I answer Final Accounts of a Sole Trader questions quickly in JAMB?

Read the stem carefully, eliminate clearly wrong options, and match the remaining choices to the key facts for Final Accounts of a Sole Trader. Practising timed Final Accounts of a Sole Trader questions builds the speed you need for UTME's pace of about 40 seconds per question.

Are these JAMB Principles of Accounts Final Accounts of a Sole Trader questions past questions or original?

They are original questions written to JAMB (UTME) standard and mapped to the official syllabus — not reproduced past papers. This keeps them legal to use freely while closely mirroring how the real exam tests the topic.

Where can I practise Final Accounts of a Sole Trader questions free without signing up?

Right here — tap “Start Final Accounts of a Sole Trader practice” on this page to begin instantly. Belmadeng's CBT practice is completely free and needs no sign-up, download or subscription.

About these questions: original, JAMB-standard items written from the official UTME Principles of Accounts syllabus (last reviewed 2026-09-18). Belmadeng is an independent study platform and is not affiliated with JAMB. Spotted an error? Use the report link.