POST UTME AFE BABALOLA UNIVERSITY 2023 Accounting | Objective

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Question 1
A company issues 10,000, 9% debentures of ₦100 each at a discount of 5%. Calculate the amount received from debenture holders and the amount of discount.
Correct A. ₦950,000
B. ₦1,000,000
C. ₦1,050,000
D. ₦1,100,000

Correct Answer: A

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Question 2
A manufacturing company uses a job costing system. The following data are extracted from the company's records for the year ended December 31, 2022: Direct Materials: ₦1,500,000 Direct Labour: ₦750,000 Overheads: ₦1,200,000 Total Cost: ₦3,450,000 Selling Price per unit: ₦2,500 Number of units sold: 1,500 Determine the profit or loss for the year.
Correct A. ₦1,125,000
B. ₦1,250,000
C. ₦1,375,000
D. ₦1,500,000

Correct Answer: A

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Question 3
A company's balance sheet as at December 31, 2022, is as follows: Assets: ₦1,500,000 (Current Assets) ₦2,000,000 (Non-Current Assets) ₦3,500,000 (Total Assets) Liabilities: ₦1,000,000 (Current Liabilities) ₦1,500,000 (Non-Current Liabilities) ₦2,500,000 (Total Liabilities) Determine the company's equity.
A. ₦1,000,000
B. ₦1,500,000
Correct C. ₦2,000,000
D. ₦2,500,000

Correct Answer: C

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Question 4
A company issued 10,000, 9% debentures of ₦100 each at a premium of 10%. Calculate the amount received from debenture holders and the amount of premium.
A. ₦1,100,000
B. ₦1,150,000
Correct C. ₦1,200,000
D. ₦1,250,000

Correct Answer: C

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Question 5
A company's profit and loss account for the year ended December 31, 2022, is as follows: Turnover: ₦5,000,000 Cost of Goods Sold: ₦3,500,000 Gross Profit: ₦1,500,000 Operating Expenses: ₦750,000 Profit Before Tax: ₦750,000 Tax: ₦250,000 Profit After Tax: ₦500,000 Determine the company's return on equity.
A. 25%
Correct B. 30%
C. 35%
D. 40%

Correct Answer: B

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Question 6
A company uses the double-entry system of accounting. The following transactions occurred during the month of January: Purchased office supplies for ₦10,000 cash. Sold goods for ₦50,000 on credit. Paid salaries of ₦20,000 by cheque. What is the total amount of assets recorded in the ledger at the end of January?
A. ₦30,000
B. ₦40,000
Correct C. ₦50,000
D. ₦60,000

Correct Answer: C

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Question 7
A company's cash book shows the following transactions: 1. Cash received from customers ₦50,000. 2. Cash paid to suppliers ₦20,000. 3. Cash received from bank ₦10,000. 4. Cash paid to bank ₦5,000. What is the balance of the cash book at the end of the month?
A. ₦35,000
B. ₦40,000
C. ₦45,000
Correct D. ₦50,000

Correct Answer: D

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Question 8
A company's bank statement shows the following transactions: 1. Bank paid in ₦10,000. 2. Bank paid out ₦5,000. 3. Bank paid in ₦20,000. 4. Bank paid out ₦10,000. What is the balance of the bank statement at the end of the month?
A. ₦25,000
B. ₦30,000
C. ₦35,000
Correct D. ₦40,000

Correct Answer: D

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Question 9
A company's ledger shows the following transactions: 1. Purchased office supplies for ₦10,000. 2. Sold goods for ₦50,000 on credit. 3. Paid salaries of ₦20,000 by cheque. 4. Received cash from customers ₦50,000. What is the total amount of assets recorded in the ledger at the end of the month?
A. ₦60,000
B. ₦70,000
C. ₦80,000
Correct D. ₦90,000

Correct Answer: D

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Question 10
A company's cash book shows the following transactions: 1. Cash received from customers ₦50,000. 2. Cash paid to suppliers ₦20,000. 3. Cash received from bank ₦10,000. 4. Cash paid to bank ₦5,000. What is the balance of the cash book at the end of the month?
A. ₦35,000
B. ₦40,000
C. ₦45,000
Correct D. ₦50,000

Correct Answer: D

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Question 11
A manufacturing company uses the weighted average method to value its inventory. The company has three types of inventory: raw materials, work-in-progress, and finished goods. The raw materials have a cost of ₦100,000 and a quantity of 100 units. The work-in-progress has a cost of ₦200,000 and a quantity of 50 units. The finished goods have a cost of ₦300,000 and a quantity of 20 units. If the company uses a weightage of 30% for raw materials, 40% for work-in-progress, and 30% for finished goods, what is the total value of the inventory?
A. ₦250,000
Correct B. ₦300,000
C. ₦350,000
D. ₦400,000

Correct Answer: B

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Question 12
A company's trial balance shows the following accounts: Accounts Payable ₦100,000, Accounts Receivable ₦50,000, Common Stock ₦500,000, Dividends ₦20,000, Equipment ₦200,000, Interest Expense ₦15,000, Interest Income ₦10,000, Net Income ₦50,000, Prepaid Rent ₦30,000, Salaries Expense ₦40,000, Sales Revenue ₦600,000, and Utilities Expense ₦25,000. What is the total amount of assets?
A. ₦1,100,000
Correct B. ₦1,200,000
C. ₦1,300,000
D. ₦1,400,000

Correct Answer: B

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Question 13
A company uses the straight-line method to depreciate its assets. The asset has a cost of ₦500,000 and an estimated useful life of 5 years. If the asset is depreciated for 3 years, what is the annual depreciation?
A. ₦100,000
B. ₦150,000
Correct C. ₦200,000
D. ₦250,000

Correct Answer: C

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Question 14
A government agency has the following transactions: Cash received from taxpayers ₦500,000, Cash paid to suppliers ₦200,000, Cash paid to employees ₦150,000, Cash received from interest income ₦20,000, and Cash paid to interest expense ₦15,000. What is the net increase in cash?
A. ₦250,000
B. ₦275,000
Correct C. ₦300,000
D. ₦325,000

Correct Answer: C

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Question 15
A company has the following transactions: Purchased raw materials ₦100,000, Sold goods ₦200,000, Purchased equipment ₦50,000, and Sold equipment ₦20,000. What is the net increase in assets?
A. ₦150,000
B. ₦175,000
Correct C. ₦200,000
D. ₦225,000

Correct Answer: C

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Question 16
A company uses the single-entry system of accounting. The following transactions occurred during the year: a) Purchased office equipment for ₦120,000. b) Sold goods for ₦300,000. c) Purchased raw materials for ₦150,000. d) Paid salaries of ₦100,000. What is the total amount of expenses for the year?
Correct A. ₦470,000
B. ₦470,000
C. ₦470,000
D. ₦470,000

Correct Answer: A

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Question 17
A company has a capital of ₦1,500,000, divided into 150,000 shares of ₦10 each. The company issues 30,000 debentures of ₦50 each. Prepare the company's balance sheet.
A. ₦1,500,000
Correct B. ₦1,800,000
C. ₦2,000,000
D. ₦2,500,000

Correct Answer: B

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Question 18
A public sector organization has the following transactions for the year ended December 31, 2022: Revenue: ₦1,200,000, Expenditure: ₦800,000, and Capital Expenditure: ₦300,000. Prepare the organization's statement of financial performance.
A. ₦400,000
Correct B. ₦600,000
C. ₦800,000
D. ₦1,200,000

Correct Answer: B

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Question 19
A company has the following transactions for the year ended December 31, 2022: Purchased goods for ₦500,000, Sold goods for ₦700,000, and Purchased a new machine for ₦200,000. Prepare the company's trading account.
A. ₦200,000
B. ₦300,000
Correct C. ₦400,000
D. ₦500,000

Correct Answer: C

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Question 20
A company has the following transactions for the year ended December 31, 2022: Issued 10,000 shares of ₦10 each at a premium of ₦5 per share, and Purchased a new machine for ₦200,000. Prepare the company's share capital account.
A. ₦150,000
Correct B. ₦200,000
C. ₦250,000
D. ₦300,000

Correct Answer: B

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Question 21
A company has the following transactions for the year ended December 31, 2022: Purchased goods for ₦500,000, Sold goods for ₦700,000, and Purchased a new machine for ₦200,000. Prepare the company's profit and loss account.
A. ₦200,000
B. ₦300,000
Correct C. ₦400,000
D. ₦500,000

Correct Answer: C

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Question 22
In a partnership account, the capital of a partner who leaves the business is transferred to the drawing account. What is the effect of this transfer on the partner's capital account?
Correct A. The partner's capital account is reduced by the amount transferred.
B. The partner's capital account is increased by the amount transferred.
C. The partner's capital account remains unchanged.
D. The partner's capital account is closed.

Correct Answer: A

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Question 23
A company uses the cash book to record its cash transactions. What is the purpose of the cash book?
A. To record all transactions of the company.
Correct B. To record only cash transactions of the company.
C. To record only credit transactions of the company.
D. To record only debit transactions of the company.

Correct Answer: B

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Question 24
A company has the following trial balance: Debit: ₦100,000; Credit: ₦120,000. What is the cause of the discrepancy?
A. Error in recording transactions.
B. Error in posting transactions.
C. Error in balancing the accounts.
Correct D. Error in preparing the trial balance.

Correct Answer: D

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Question 25
A company uses the self-balancing ledger system. What is the purpose of the self-balancing ledger?
A. To record all transactions of the company.
B. To record only cash transactions of the company.
C. To record only credit transactions of the company.
Correct D. To ensure that the ledger accounts are always balanced.

Correct Answer: D

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