Practice Post UTME COVENANT UNIVERSITY accounting 2023 Past Questions

Question 1

A company's cash book shows a balance of ₦250,000. However, the bank statement shows a balance of ₦270,000. What is the reason for the difference?

A. ₦20,000 bank charge

B. ₦20,000 interest on bank loan

C. ₦20,000 cash deposited in error

Correct D. ₦20,000 cash withdrawn in error

Correct Answer: D

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Question 2

A partnership has two partners, A and B. The capital accounts of A and B are ₦100,000 and ₦150,000 respectively. If the profit for the year is ₦20,000, what is the share of profit of A?

Correct A. ₦10,000

B. ₦15,000

C. ₦20,000

D. ₦25,000

Correct Answer: A

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Question 3

A company issues 1,000 shares of ₦10 each at a premium of ₦2 per share. What is the total amount received from the issue of shares?

Correct A. ₦12,000

B. ₦12,000

C. ₦12,000

D. ₦12,000

Correct Answer: A

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Question 4

A company's cash book shows a balance of ₦150,000. However, the bank statement shows a balance of ₦120,000. What is the reason for the difference?

A. ₦30,000 bank charge

B. ₦30,000 interest on bank loan

C. ₦30,000 cash deposited in error

Correct D. ₦30,000 cash withdrawn in error

Correct Answer: D

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Question 5

A company issues 1,000 shares of ₦10 each at a premium of ₦2 per share. What is the total amount received from the issue of shares?

Correct A. ₦12,000

B. ₦12,000

C. ₦12,000

D. ₦12,000

Correct Answer: A

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Question 6

A company uses the cash book to record transactions. The cash book shows a balance of ₦120,000. However, the bank statement shows a balance of ₦110,000. What is the reason for the difference?

A. The company has not recorded a deposit of ₦10,000.

Correct B. The company has not recorded a withdrawal of ₦10,000.

C. The bank has charged a fee of ₦10,000.

D. The company has not recorded a loan of ₦10,000.

Correct Answer: B

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Question 7

A manufacturing company uses the process costing method to value its products. The company has two departments: Cutting and Assembly. The Cutting department has a cost of ₦100,000 and the Assembly department has a cost of ₦150,000. What is the total cost of the product?

Correct A. ₦250,000

B. ₦200,000

C. ₦150,000

D. ₦100,000

Correct Answer: A

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Question 8

A company prepares a trial balance. The trial balance shows a debit balance of ₦50,000 in the account 'Office Expenses'. However, the company's records show that the office expenses were actually ₦30,000. What is the reason for the difference?

Correct A. The company has not recorded a payment of ₦20,000.

B. The company has not recorded a receipt of ₦20,000.

C. The company has not recorded a loan of ₦20,000.

D. The company has not recorded a deposit of ₦20,000.

Correct Answer: A

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Question 9

A company uses the self-balancing ledger system. The ledger shows a balance of ₦100,000 in the account 'Sales'. However, the company's records show that the sales were actually ₦120,000. What is the reason for the difference?

Correct A. The company has not recorded a sale of ₦20,000.

B. The company has not recorded a purchase of ₦20,000.

C. The company has not recorded a loan of ₦20,000.

D. The company has not recorded a deposit of ₦20,000.

Correct Answer: A

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Question 10

A company prepares a bank reconciliation statement. The bank statement shows a balance of ₦150,000. However, the company's records show that the cash balance is actually ₦120,000. What is the reason for the difference?

A. The company has not recorded a deposit of ₦30,000.

Correct B. The company has not recorded a withdrawal of ₦30,000.

C. The bank has charged a fee of ₦30,000.

D. The company has not recorded a loan of ₦30,000.

Correct Answer: B

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Question 11

A company uses the double-entry system of accounting. The following transactions occurred during the month of January: 1. Purchased office supplies for ₦10,000 cash. 2. Sold goods for ₦50,000 on credit. 3. Paid salaries of ₦20,000 by cheque. 4. Collected cash of ₦30,000 from a customer who owed the company ₦50,000. 5. Purchased a new machine for ₦80,000 by instalment plan. What is the total amount of cash received or paid during the month?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 12

A company's accounting records show the following balances: Cash: ₦100,000 Accounts Receivable: ₦50,000 Inventory: ₦200,000 Prepaid Rent: ₦20,000 Equipment: ₦150,000 Accumulated Depreciation: ₦30,000 Common Stock: ₦300,000 Retained Earnings: ₦200,000 What is the total amount of assets?

Correct A. ₦820,000

B. ₦830,000

C. ₦840,000

D. ₦850,000

Correct Answer: A

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Question 13

A company uses the allowance method for estimating bad debts. The following information is available: Accounts Receivable: ₦500,000 Allowance for Bad Debts: ₦20,000 Bad Debts Expense: ₦10,000 What is the net realizable value of Accounts Receivable?

A. ₦480,000

B. ₦490,000

Correct C. ₦500,000

D. ₦510,000

Correct Answer: C

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Question 14

A company's cash book shows the following transactions: 1. Purchased office supplies for ₦10,000 cash. 2. Sold goods for ₦50,000 on credit. 3. Paid salaries of ₦20,000 by cheque. 4. Collected cash of ₦30,000 from a customer who owed the company ₦50,000. What is the total amount of cash received or paid?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 15

A company's accounting records show the following balances: Cash: ₦100,000 Accounts Receivable: ₦50,000 Inventory: ₦200,000 Prepaid Rent: ₦20,000 Equipment: ₦150,000 Accumulated Depreciation: ₦30,000 Common Stock: ₦300,000 Retained Earnings: ₦200,000 What is the total amount of liabilities?

Correct A. ₦0

B. ₦20,000

C. ₦40,000

D. ₦60,000

Correct Answer: A

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Question 16

A company uses the single-entry system of accounting. The company's trial balance as at 31st December 2022 shows the following balances: Cash 10,000, Accounts Payable 5,000, Common Stock 20,000, and Retained Earnings 15,000. The company also has a note payable of 8,000. What is the company's total liabilities as at 31st December 2022?

A. 13,000

Correct B. 15,000

C. 18,000

D. 20,000

Correct Answer: B

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Question 17

A manufacturing company uses the process costing method to assign costs to its products. The company has two departments: Cutting and Assembly. The Cutting department has a total cost of 100,000 and the Assembly department has a total cost of 150,000. If the company produces 10,000 units, what is the total cost per unit?

A. 15

B. 20

Correct C. 25

D. 30

Correct Answer: C

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Question 18

A company uses the double-entry system of accounting. The company's journal entry for the purchase of equipment on 1st January 2022 is as follows: Debit Equipment 10,000 and Credit Cash 10,000. What is the effect of this transaction on the company's balance sheet?

A. Increase in Assets and Increase in Liabilities

Correct B. Increase in Assets and Decrease in Liabilities

C. Decrease in Assets and Increase in Liabilities

D. Decrease in Assets and Decrease in Liabilities

Correct Answer: B

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Question 19

A company uses the self-balancing ledger system. The company's ledger account for Sales Revenue shows the following transactions: Debit Sales Revenue 10,000 and Credit Cash 10,000. What is the effect of this transaction on the company's income statement?

A. Increase in Revenue and Increase in Expenses

Correct B. Increase in Revenue and Decrease in Expenses

C. Decrease in Revenue and Increase in Expenses

D. Decrease in Revenue and Decrease in Expenses

Correct Answer: B

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Question 20

A company uses the trial balance method to prepare its financial statements. The company's trial balance as at 31st December 2022 shows the following balances: Cash 10,000, Accounts Payable 5,000, Common Stock 20,000, and Retained Earnings 15,000. What is the company's total equity as at 31st December 2022?

A. 35,000

B. 40,000

Correct C. 45,000

D. 50,000

Correct Answer: C

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Question 21

A company's cash book shows a balance of ₦50,000. However, the bank statement shows a balance of ₦60,000. What is the most likely reason for the discrepancy?

A. The company has not yet deposited the cash into the bank.

Correct B. The bank has not yet credited the company's account for the deposited cash.

C. The company has not yet debited the bank for the withdrawn cash.

D. The bank has charged a service fee on the company's account.

Correct Answer: B

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Question 22

A company's trial balance shows the following balances: Accounts Payable ₦20,000, Sales Revenue ₦50,000, Cost of Goods Sold ₦30,000. What is the net income of the company?

A. ₦20,000

B. ₦30,000

Correct C. ₦40,000

D. ₦50,000

Correct Answer: C

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Question 23

A company's balance sheet shows the following balances: Cash ₦10,000, Accounts Payable ₦20,000, Common Stock ₦50,000. What is the total equity of the company?

A. ₦30,000

B. ₦40,000

Correct C. ₦50,000

D. ₦60,000

Correct Answer: C

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Question 24

A company's income statement shows the following balances: Cost of Goods Sold ₦30,000, Gross Profit ₦20,000, Operating Expenses ₦10,000. What is the net income of the company?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 25

A company's balance sheet shows the following balances: Cash ₦10,000, Accounts Payable ₦20,000, Common Stock ₦50,000. What is the total assets of the company?

A. ₦30,000

B. ₦40,000

Correct C. ₦50,000

D. ₦60,000

Correct Answer: C

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