Practice Post UTME BABCOCK UNIVERSITY accounting 2022 Past Questions

Question 1

A company uses the straight-line method of depreciation. If the asset's useful life is 5 years and its residual value is ₦50,000, what is the annual depreciation charge if the asset's cost is ₦250,000?

A. ₦40,000

Correct B. ₦45,000

C. ₦50,000

D. ₦55,000

Correct Answer: B

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Question 2

A trader's trial balance as at 31st December 2022 is as follows: Debit ₦ 50,000 Cash ₦ 20,000 Office Equipment ₦ 30,000 Accounts Payable ₦ 10,000 Sales Revenue ₦ 15,000 Rent Expense ₦ 25,000 Utilities Expense Credit ₦ 20,000 Accounts Receivable ₦ 15,000 Salaries Expense ₦ 10,000 Office Supplies ₦ 30,000 Utilities Expense ₦ 25,000 Rent Expense What is the trader's net profit for the year?

Correct A. ₦25,000

B. ₦30,000

C. ₦35,000

D. ₦40,000

Correct Answer: A

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Question 3

A company's balance sheet as at 31st December 2022 is as follows: Assets ₦ 100,000 Cash ₦ 50,000 Accounts Receivable ₦ 20,000 Office Equipment ₦ 30,000 Utilities Expense Liabilities ₦ 20,000 Accounts Payable ₦ 15,000 Salaries Expense What is the company's net worth?

A. ₦50,000

Correct B. ₦60,000

C. ₦70,000

D. ₦80,000

Correct Answer: B

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Question 4

A company uses the weighted average method of inventory valuation. If the cost of the current year's inventory is ₦100,000 and the cost of the previous year's inventory is ₦80,000, what is the weighted average cost per unit if the current year's inventory is 500 units and the previous year's inventory is 300 units?

A. ₦120

Correct B. ₦130

C. ₦140

D. ₦150

Correct Answer: B

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Question 5

A company's trial balance as at 31st December 2022 is as follows: Debit ₦ 50,000 Cash ₦ 20,000 Office Equipment ₦ 30,000 Accounts Payable ₦ 10,000 Sales Revenue ₦ 15,000 Rent Expense ₦ 25,000 Utilities Expense Credit ₦ 20,000 Accounts Receivable ₦ 15,000 Salaries Expense ₦ 10,000 Office Supplies ₦ 30,000 Utilities Expense ₦ 25,000 Rent Expense What is the company's net profit for the year?

Correct A. ₦25,000

B. ₦30,000

C. ₦35,000

D. ₦40,000

Correct Answer: A

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Question 6

A partnership is formed between two individuals, A and B, with a capital of ₦500,000 each. The profit-sharing ratio is 3:2. If the profit for the year is ₦750,000, calculate the amount of profit that will be distributed to A.

Correct A. ₦450,000

B. ₦525,000

C. ₦600,000

D. ₦675,000

Correct Answer: A

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Question 7

A company issues 10,000, 9% debentures of ₦100 each at a discount of 5%. Calculate the amount of discount on the issue of debentures.

Correct A. ₦50,000

B. ₦75,000

C. ₦90,000

D. ₦100,000

Correct Answer: A

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Question 8

A company's trial balance shows the following balances: Accounts Payable ₦150,000, Accounts Receivable ₦200,000, Common Stock ₦500,000, Retained Earnings ₦300,000. Prepare the company's balance sheet.

Correct A. {\begin{tabular}{|l|l|} \hline \textbf{Assets} & \textbf{₦} \\hline \text{Accounts Payable} & 150,000 \\ \text{Accounts Receivable} & 200,000 \\ \text{Common Stock} & 500,000 \\ \text{Retained Earnings} & 300,000 \\ \hline \text{Total Assets} & 1,250,000 \\ \hline \end{tabular}}

B. {\begin{tabular}{|l|l|} \hline \textbf{Liabilities} & \textbf{₦} \\ \hline \text{Accounts Payable} & 150,000 \\ \text{Common Stock} & 500,000 \\ \text{Retained Earnings} & 300,000 \\ \hline \text{Total Liabilities} & 950,000 \\ \hline \end{tabular}}

C. {\begin{tabular}{|l|l|} \hline \textbf{Equity} & \textbf{₦} \\ \hline \text{Common Stock} & 500,000 \\ \text{Retained Earnings} & 300,000 \\ \hline \text{Total Equity} & 800,000 \\ \hline \end{tabular}}

D. {\begin{tabular}{|l|l|} \hline \textbf{Assets} & \textbf{₦} \\ \hline \text{Accounts Payable} & 150,000 \\ \text{Accounts Receivable} & 200,000 \\ \text{Common Stock} & 500,000 \\ \text{Retained Earnings} & 300,000 \\ \hline \text{Total Assets} & 1,250,000 \\ \hline \end{tabular}}

Correct Answer: A

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Question 9

A company uses the straight-line method of depreciation for its assets. If the asset has a useful life of 5 years and a residual value of ₦50,000, calculate the annual depreciation charge for the asset.

Correct A. ₦80,000

B. ₦90,000

C. ₦100,000

D. ₦110,000

Correct Answer: A

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Question 10

A company's balance sheet shows the following balances: Cash ₦200,000, Accounts Payable ₦150,000, Common Stock ₦500,000, Retained Earnings ₦300,000. Prepare the company's statement of cash flows.

Correct A. {\begin{tabular}{|l|l|} \hline \textbf{Cash Flows from Operating Activities} & \textbf{₦} \\ \hline \text{Net Income} & 300,000 \\ \text{Depreciation} & 100,000 \\ \text{Accounts Payable} & 150,000 \\ \hline \text{Total Cash Flows from Operating Activities} & 550,000 \\ \hline \end{tabular}}

B. {\begin{tabular}{|l|l|} \hline \textbf{Cash Flows from Investing Activities} & \textbf{₦} \\ \hline \text{Purchase of Assets} & 200,000 \\ \text{Sale of Assets} & 100,000 \\ \hline \text{Total Cash Flows from Investing Activities} & 100,000 \\ \hline \end{tabular}}

C. {\begin{tabular}{|l|l|} \hline \textbf{Cash Flows from Financing Activities} & \textbf{₦} \\ \hline \text{Issuance of Common Stock} & 500,000 \\ \text{Dividends Paid} & 100,000 \\ \hline \text{Total Cash Flows from Financing Activities} & 400,000 \\ \hline \end{tabular}}

D. {\begin{tabular}{|l|l|} \hline \textbf{Cash Flows from Operating Activities} & \textbf{₦} \\ \hline \text{Net Income} & 300,000 \\ \text{Depreciation} & 100,000 \\ \text{Accounts Payable} & 150,000 \\ \hline \text{Total Cash Flows from Operating Activities} & 550,000 \\ \hline \end{tabular}}

Correct Answer: A

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Question 11

A company uses the single-entry system of accounting. The company's cash account shows a balance of ₦125,000. The company's bank statement shows a balance of ₦120,000. The company's cash book shows a debit balance of ₦15,000. What is the correct journal entry to record the discrepancy?

Correct A. ₦15,000 debit to Cash and ₦15,000 credit to Bank

B. ₦15,000 debit to Bank and ₦15,000 credit to Cash

C. ₦15,000 debit to Bank and ₦15,000 credit to Profit or Loss

D. ₦15,000 debit to Cash and ₦15,000 credit to Profit or Loss

Correct Answer: A

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Question 12

A company's trial balance shows the following balances: Accounts Payable ₦150,000, Sales Revenue ₦500,000, Cost of Goods Sold ₦300,000, and Net Income ₦100,000. What is the correct journal entry to record the closing of the accounts?

A. ₦500,000 debit to Sales Revenue and ₦500,000 credit to Retained Earnings

B. ₦300,000 debit to Cost of Goods Sold and ₦300,000 credit to Retained Earnings

C. ₦150,000 debit to Accounts Payable and ₦150,000 credit to Retained Earnings

Correct D. ₦100,000 debit to Net Income and ₦100,000 credit to Retained Earnings

Correct Answer: D

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Question 13

A government agency uses the accrual basis of accounting. The agency's financial statements show the following balances: Accounts Payable ₦200,000, Salaries Expense ₦500,000, and Net Income ₦150,000. What is the correct journal entry to record the accrual of salaries?

Correct A. ₦500,000 debit to Salaries Expense and ₦500,000 credit to Accounts Payable

B. ₦500,000 debit to Salaries Expense and ₦500,000 credit to Cash

C. ₦500,000 debit to Cash and ₦500,000 credit to Salaries Expense

D. ₦500,000 debit to Salaries Expense and ₦500,000 credit to Retained Earnings

Correct Answer: A

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Question 14

A company's financial statements show the following balances: Accounts Receivable ₦300,000, Sales Revenue ₦600,000, and Net Income ₦200,000. What is the correct journal entry to record the collection of accounts receivable?

Correct A. ₦300,000 debit to Accounts Receivable and ₦300,000 credit to Cash

B. ₦300,000 debit to Cash and ₦300,000 credit to Accounts Receivable

C. ₦300,000 debit to Accounts Receivable and ₦300,000 credit to Retained Earnings

D. ₦300,000 debit to Cash and ₦300,000 credit to Retained Earnings

Correct Answer: A

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Question 15

A government agency uses the accrual basis of accounting. The agency's financial statements show the following balances: Accounts Payable ₦250,000, Salaries Expense ₦700,000, and Net Income ₦250,000. What is the correct journal entry to record the accrual of salaries?

Correct A. ₦700,000 debit to Salaries Expense and ₦700,000 credit to Accounts Payable

B. ₦700,000 debit to Salaries Expense and ₦700,000 credit to Cash

C. ₦700,000 debit to Cash and ₦700,000 credit to Salaries Expense

D. ₦700,000 debit to Salaries Expense and ₦700,000 credit to Retained Earnings

Correct Answer: A

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Question 16

In a partnership account, the capital of a partner who withdraws cash from the business is reduced by the amount withdrawn. However, if the partner's capital is reduced below the minimum required by the partnership agreement, the deficit is treated as a loan from the partner to the business. What is the correct treatment of the deficit?

Correct A. The deficit is treated as a loan from the partner to the business.

B. The deficit is treated as a loss of the business.

C. The deficit is treated as a reduction in the partner's capital.

D. The deficit is treated as a profit of the business.

Correct Answer: A

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Question 17

A manufacturing company uses a job costing system. The company has the following costs: direct materials 100,000, direct labor 150,000, and overhead 200,000. What is the total cost of production?

Correct A. 550,000

B. 450,000

C. 650,000

D. 750,000

Correct Answer: A

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Question 18

A company uses the double-entry system of accounting. The company has the following transactions: debit cash 10,000 and credit accounts payable 10,000. What is the effect of this transaction on the accounting equation?

A. Increases assets and decreases liabilities.

B. Decreases assets and increases liabilities.

C. Increases liabilities and decreases assets.

Correct D. Has no effect on the accounting equation.

Correct Answer: D

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Question 19

A company uses the single-entry system of accounting. The company has the following transactions: debit cash 10,000 and credit accounts payable 10,000. What is the effect of this transaction on the accounting equation?

A. Increases assets and decreases liabilities.

B. Decreases assets and increases liabilities.

C. Increases liabilities and decreases assets.

Correct D. Has no effect on the accounting equation.

Correct Answer: D

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Question 20

A government agency uses the accrual basis of accounting. The agency has the following transactions: revenue 100,000 and expenses 50,000. What is the net income of the agency?

Correct A. 50,000

B. 100,000

C. 150,000

D. 200,000

Correct Answer: A

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Question 21

A public sector organization has a budget of ₦1,500,000 for the year. The organization has the following expenses: salaries ₦600,000, rent ₦200,000, utilities ₦150,000, and miscellaneous ₦100,000. What is the percentage of the budget spent on salaries?

Correct A. 40%

B. 30%

C. 50%

D. 60%

Correct Answer: A

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Question 22

A company has the following transactions: purchased goods for ₦500,000, sold goods for ₦700,000, and paid salaries of ₦150,000. What is the net effect on the company's cash balance?

Correct A. ₦250,000 increase

B. ₦250,000 decrease

C. ₦500,000 increase

D. ₦500,000 decrease

Correct Answer: A

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Question 23

A departmental store has the following transactions: purchased goods for ₦300,000, sold goods for ₦450,000, and paid rent of ₦100,000. What is the net effect on the store's cash balance?

Correct A. ₦150,000 increase

B. ₦150,000 decrease

C. ₦300,000 increase

D. ₦300,000 decrease

Correct Answer: A

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Question 24

A company has the following transactions: purchased goods for ₦400,000, sold goods for ₦600,000, and paid salaries of ₦200,000. What is the net effect on the company's cash balance?

Correct A. ₦200,000 increase

B. ₦200,000 decrease

C. ₦400,000 increase

D. ₦400,000 decrease

Correct Answer: A

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Question 25

A departmental store has the following transactions: purchased goods for ₦250,000, sold goods for ₦375,000, and paid rent of ₦75,000. What is the net effect on the store's cash balance?

Correct A. ₦125,000 increase

B. ₦125,000 decrease

C. ₦250,000 increase

D. ₦250,000 decrease

Correct Answer: A

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