POST UTME CHRISTOPHER UNIVERSITY 2021 Accounting | Objective

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Question 1
A government agency's accounting system is based on the accrual basis of accounting. Which of the following is a characteristic of the accrual basis of accounting?
Correct A. Matching of expenses with revenues
B. Matching of revenues with cash received
C. Matching of expenses with cash paid
D. Matching of revenues with expenses incurred

Correct Answer: A

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Question 2
A company uses a self-balancing ledger system. Which of the following is a characteristic of a self-balancing ledger?
Correct A. The ledger is balanced at the end of each accounting period
B. The ledger is balanced at the end of each month
C. The ledger is balanced at the end of each quarter
D. The ledger is balanced at the end of each year

Correct Answer: A

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Question 3
A company's cash book shows a balance of ₦100,000. However, the bank statement shows a balance of ₦120,000. What is the reason for the difference?
A. The company has made a mistake in recording transactions
B. The bank has made a mistake in recording transactions
Correct C. The company has deposited cash into the bank but has not yet been recorded
D. The company has withdrawn cash from the bank but has not yet been recorded

Correct Answer: C

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Question 4
A company's asset is depreciated using the straight-line method. The asset's cost is ₦500,000 and its useful life is 5 years. What is the annual depreciation charge?
A. ₦100,000
Correct B. ₦80,000
C. ₦60,000
D. ₦50,000

Correct Answer: B

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Question 5
A company's financial statements are prepared using the accrual basis of accounting. Which of the following is a characteristic of the accrual basis of accounting?
Correct A. Matching of expenses with revenues
B. Matching of revenues with cash received
C. Matching of expenses with cash paid
D. Matching of revenues with expenses incurred

Correct Answer: A

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Question 6
A company's trial balance shows a discrepancy of ₦1,500 between the debit and credit sides. The company's accountant has identified the following errors: (i) an item of ₦2,000 was posted twice on the debit side, (ii) an item of ₦1,500 was posted twice on the credit side, and (iii) an item of ₦3,000 was posted on the wrong side. Calculate the correct net balance of the trial balance.
A. ₦1,000
Correct B. ₦1,500
C. ₦2,000
D. ₦3,000

Correct Answer: B

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Question 7
A company's balance sheet as at 31st December 2020 shows the following: Equity Share Capital ₦1,000,000, Retained Earnings ₦500,000, and Accumulated Depreciation ₦200,000. Calculate the company's net worth.
Correct A. ₦1,300,000
B. ₦1,500,000
C. ₦1,700,000
D. ₦2,000,000

Correct Answer: A

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Question 8
A company uses the straight-line method of depreciation. If the cost of a machine is ₦50,000 and its residual value is ₦10,000, calculate the annual depreciation charge if the machine is expected to last for 5 years.
A. ₦7,000
Correct B. ₦8,000
C. ₦9,000
D. ₦10,000

Correct Answer: B

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Question 9
A government agency is required to prepare a statement of cash flows. The agency's cash inflows from operations are ₦1,500,000, and its cash outflows from operations are ₦1,200,000. Calculate the net cash inflow from operations.
Correct A. ₦300,000
B. ₦400,000
C. ₦500,000
D. ₦600,000

Correct Answer: A

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Question 10
A company's trial balance shows the following: Sales ₦1,500,000, Cost of Goods Sold ₦1,200,000, and Gross Profit ₦300,000. Calculate the company's operating profit.
A. ₦200,000
Correct B. ₦300,000
C. ₦400,000
D. ₦500,000

Correct Answer: B

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Question 11
A company issued 10,000 shares of 1 par value at a premium of 3 per share. The proceeds from the issue were credited to a share capital account. Prepare the journal entry to record the issue of the shares.
A. Debit Share Capital 30,000, Credit Cash 30,000
Correct B. Debit Share Capital 30,000, Credit Share Premium 30,000
C. Debit Share Capital 10,000, Credit Cash 10,000
D. Debit Share Capital 10,000, Credit Share Premium 10,000

Correct Answer: B

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Question 12
A company's trial balance showed a discrepancy of 1,000 between the debit and credit sides. The company's accountant suspected that the discrepancy was due to an error in the journal entry for the purchase of office equipment. The accountant prepared the following schedule to investigate the discrepancy:
Correct A. The discrepancy is due to an error in the journal entry for the purchase of office equipment.
B. The discrepancy is due to an error in the journal entry for the sale of office equipment.
C. The discrepancy is due to an error in the journal entry for the purchase of office supplies.
D. The discrepancy is due to an error in the journal entry for the sale of office supplies.

Correct Answer: A

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Question 13
A company's assets are depreciated using the straight-line method. The company's accountant prepared the following schedule to calculate the depreciation for the year:
Correct A. Depreciation expense = 10,000, Accumulated depreciation = 10,000
B. Depreciation expense = 5,000, Accumulated depreciation = 5,000
C. Depreciation expense = 15,000, Accumulated depreciation = 15,000
D. Depreciation expense = 20,000, Accumulated depreciation = 20,000

Correct Answer: A

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Question 14
A company's bank reconciliation statement showed a discrepancy of 500 between the company's records and the bank's records. The company's accountant suspected that the discrepancy was due to an error in the bank statement. The accountant prepared the following schedule to investigate the discrepancy:
Correct A. The discrepancy is due to an error in the bank statement.
B. The discrepancy is due to an error in the company's records.
C. The discrepancy is due to an error in the bank's records.
D. The discrepancy is due to an error in the company's accounting system.

Correct Answer: A

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Question 15
A government agency's financial statements showed a surplus of 10,000. The agency's accountant prepared the following schedule to analyze the surplus:
A. The surplus is due to an increase in revenue.
Correct B. The surplus is due to a decrease in expenses.
C. The surplus is due to an increase in assets.
D. The surplus is due to a decrease in liabilities.

Correct Answer: B

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Question 16
In a partnership account, the capital of each partner is divided in the ratio of their profit-sharing ratio. However, the profit-sharing ratio is different from the capital-sharing ratio. If the capital-sharing ratio is 3:5 and the profit-sharing ratio is 2:3, what is the ratio of the capital of the first partner to the capital of the second partner?
Correct A. 1:1.67
B. 1:2
C. 1.67:1
D. 2:1

Correct Answer: A

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Question 17
A company uses the job costing method to account for its manufacturing costs. The company has two departments: Cutting and Assembly. The Cutting department has a direct labor cost of ₦120,000 and an overhead cost of ₦80,000. The Assembly department has a direct labor cost of ₦150,000 and an overhead cost of ₦100,000. What is the total manufacturing cost of the company?
A. ₦370,000
Correct B. ₦420,000
C. ₦470,000
D. ₦520,000

Correct Answer: B

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Question 18
A company has the following trial balance as at December 31, 2022: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦100,000 | | | Accounts Payable | | ₦50,000 | | Sales Revenue | | ₦200,000 | | Cost of Goods Sold | ₦150,000 | | | Net Income | | ₦50,000 | | Total | ₦150,000 | ₦300,000 | What is the correct balance of the Cash account?
Correct A. ₦100,000
B. ₦150,000
C. ₦200,000
D. ₦250,000

Correct Answer: A

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Question 19
A company uses the single-entry system of accounting. The company has the following transactions for the year ended December 31, 2022: | Date | Transaction | | --- | --- | | January 1, 2022 | Cash | ₦100,000 | | February 15, 2022 | Sales Revenue | ₦50,000 | | March 31, 2022 | Cost of Goods Sold | ₦30,000 | | April 15, 2022 | Cash | ₦20,000 | | May 31, 2022 | Sales Revenue | ₦40,000 | | June 15, 2022 | Cost of Goods Sold | ₦25,000 | | July 31, 2022 | Cash | ₦15,000 | | August 15, 2022 | Sales Revenue | ₦35,000 | | September 30, 2022 | Cost of Goods Sold | ₦20,000 | | October 15, 2022 | Cash | ₦10,000 | | November 30, 2022 | Sales Revenue | ₦45,000 | | December 15, 2022 | Cost of Goods Sold | ₦22,500 | What is the total sales revenue for the year ended December 31, 2022?
A. ₦250,000
B. ₦275,000
Correct C. ₦300,000
D. ₦325,000

Correct Answer: C

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Question 20
A company has the following financial statements for the year ended December 31, 2022: | Statement | Amount | | --- | --- | | Revenue | ₦500,000 | | Cost of Goods Sold | ₦250,000 | | Gross Profit | ₦250,000 | | Operating Expenses | ₦150,000 | | Net Income | ₦100,000 | What is the company's gross profit margin?
A. 25%
Correct B. 30%
C. 35%
D. 40%

Correct Answer: B

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Question 21
A company maintains a cash book and a general ledger. The cash book shows a balance of ₦12,500, while the general ledger shows a balance of ₦15,000. The bank statement shows a balance of ₦18,000. What is the correct balance of the company's cash account?
A. ₦12,500
B. ₦15,000
Correct C. ₦18,000
D. ₦20,000

Correct Answer: C

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Question 22
A company's trial balance shows the following accounts: Debitors ₦50,000, Creditors ₦30,000, Capital ₦100,000, and Profit and Loss Account ₦20,000. What is the correct balance of the company's equity?
A. ₦120,000
Correct B. ₦130,000
C. ₦140,000
D. ₦150,000

Correct Answer: B

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Question 23
A company uses a self-balancing ledger to record its transactions. The ledger shows the following accounts: Sales ₦100,000, Purchases ₦80,000, and Capital ₦120,000. What is the correct balance of the company's profit and loss account?
A. ₦20,000
B. ₦30,000
Correct C. ₦40,000
D. ₦50,000

Correct Answer: C

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Question 24
A government agency uses a public sector accounting system to record its transactions. The system shows the following accounts: Revenue ₦500,000, Expenditure ₦400,000, and Capital ₦200,000. What is the correct balance of the agency's financial position?
A. ₦100,000
B. ₦200,000
C. ₦300,000
Correct D. ₦400,000

Correct Answer: D

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Question 25
A company maintains an incomplete records system to record its transactions. The system shows the following accounts: Sales ₦200,000, Purchases ₦150,000, and Capital ₦250,000. What is the correct balance of the company's profit and loss account?
A. ₦50,000
B. ₦60,000
Correct C. ₦70,000
D. ₦80,000

Correct Answer: C

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