POST UTME ELIZADE UNIVERSITY 2023 Accounting | Objective

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Question 1
A company issued 10,000 shares of £ 1 each at a premium of £ 0.50 per share. The issue expenses were £ 5,000. Prepare the journal entry for the issue of shares.
A. Debit Share Capital £ 10,000, Credit Cash £ 10,000
Correct B. Debit Share Capital £ 10,000, Credit Cash £ 10,500
C. Debit Share Capital £ 10,000, Credit Cash £ 10,000, Debit Issue Expenses £ 5,000
D. Debit Share Capital £ 10,000, Credit Cash £ 10,500, Debit Issue Expenses £ 5,000

Correct Answer: B

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Question 2
A company's trial balance as at 31st December 2022 is as follows: Debit £ 10,000 £ 20,000 £ 30,000 £ 40,000 £ 50,000 £ 60,000 £ 70,000 £ 80,000 £ 90,000 £ 100,000 Credit £ 10,000 £ 20,000 £ 30,000 £ 40,000 £ 50,000 £ 60,000 £ 70,000 £ 80,000 £ 90,000 £ 100,000 What is the total of the debit balances?
Correct A. £ 500,000
B. £ 600,000
C. £ 700,000
D. £ 800,000

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) £ 200,000 (Debtors) £ 300,000 (Stock) Liabilities: £ 50,000 (Creditors) What is the total of the assets?
A. £ 500,000
B. £ 600,000
Correct C. £ 700,000
D. £ 800,000

Correct Answer: C

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Question 4
A company's trial balance as at 31st December 2022 is as follows: Debit £ 10,000 £ 20,000 £ 30,000 £ 40,000 £ 50,000 £ 60,000 £ 70,000 £ 80,000 £ 90,000 £ 100,000 Credit £ 10,000 £ 20,000 £ 30,000 £ 40,000 £ 50,000 £ 60,000 £ 70,000 £ 80,000 £ 90,000 £ 100,000 What is the total of the credit balances?
A. £ 500,000
B. £ 600,000
C. £ 700,000
Correct D. £ 800,000

Correct Answer: D

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Question 5
A company's balance sheet as at 31st December 2022 is as follows: Assets: £ 100,000 (Cash) £ 200,000 (Debtors) £ 300,000 (Stock) Liabilities: £ 50,000 (Creditors) What is the total of the liabilities?
A. £ 500,000
B. £ 600,000
Correct C. £ 700,000
D. £ 800,000

Correct Answer: C

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Question 6
A company's trial balance shows an error of ₦0.50 in the debit side of the accounts payable account. The correct amount is ₦1,000. What is the correct amount of the accounts payable account?
A. ₦1,000.50
Correct B. ₦1,000
C. ₦0,999.50
D. ₦0,999

Correct Answer: B

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Question 7
A company's balance sheet shows an asset of ₦1,000,000. If the company's equity is ₦0,500,000, what is the amount of liabilities?
A. ₥0,500,000
Correct B. ₥1,000,000
C. ₥0,500,000
D. ₥0,500,000

Correct Answer: B

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Question 8
A company issues 10,000 shares of ₡0 par value at a premium of ₥ per share. What is the total amount received from the issue of shares?
Correct A. ₡00,000
B. ₡00,000
C. ₡00,000
D. ₡00,000

Correct Answer: A

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Question 9
A company's depreciation policy is to depreciate its assets by 10% per annum. If the asset's original value is ₡00,000, what is the asset's value after 2 years?
Correct A. ₨0,000
B. ₩0,000
C. ₨0,000
D. ₩0,000

Correct Answer: A

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Question 10
A company's trial balance shows an error of ₦0.50 in the debit side of the accounts payable account. The correct amount is ₦1,000. What is the correct amount of the accounts payable account?
A. ₦1,000.50
Correct B. ₦1,000
C. ₦0,999.50
D. ₦0,999

Correct Answer: B

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Question 11
A partnership is formed between two individuals, A and B, with a capital contribution of ₦500,000 and ₦300,000 respectively. The partnership agreement states that profits and losses will be shared in the ratio 3:2. If the partnership makes a profit of ₦150,000, how much will A receive?
Correct A. ₦180,000
B. ₦120,000
C. ₦150,000
D. ₦200,000

Correct Answer: A

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Question 12
A company issues 1,000 shares of ₦10 each at a premium of ₦5 per share. If the company receives a total of ₦12,000,000, how much of the amount will be credited to the share capital account?
Correct A. ₦10,000,000
B. ₦12,000,000
C. ₦11,000,000
D. ₦9,000,000

Correct Answer: A

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Question 13
A company's cash book shows a balance of ₦50,000. The bank statement shows a balance of ₦60,000. The difference between the two balances is ₦5,000. What is the reason for the difference?
A. Bank charges
Correct B. Cheque returned unpaid
C. Interest on bank balance
D. Deposit in transit

Correct Answer: B

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Question 14
A company's trading account shows a profit of ₦200,000. The company's profit and loss account shows a net profit of ₦250,000. What is the reason for the difference?
A. Depreciation
B. Interest on loans
C. Dividend on shares
Correct D. Provision for bad debts

Correct Answer: D

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Question 15
A company issues 5% debentures of ₦100 each at a premium of ₦10 per share. If the company receives a total of ₦500,000, how much of the amount will be credited to the debenture account?
Correct A. ₦450,000
B. ₦500,000
C. ₦475,000
D. ₦525,000

Correct Answer: A

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Question 16
A company uses the weighted average method to value its inventory. The cost of goods available for sale is ₦1,500,000. The beginning inventory is ₦300,000, and the cost of purchases is ₦1,200,000. The company uses a periodic inventory system. Calculate the cost of goods sold using the weighted average method.
A. ₦900,000
B. ₦1,000,000
Correct C. ₦1,050,000
D. ₦1,200,000

Correct Answer: C

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Question 17
A company has the following transactions related to its manufacturing department: | Date | Description | Quantity | Unit Cost | Total Cost | | --- | --- | --- | --- | --- | | 1 Jan | Purchase of raw materials | 100 | ₦50 | ₦5,000 | | 15 Jan | Purchase of raw materials | 150 | ₦60 | ₦9,000 | | 20 Jan | Purchase of raw materials | 200 | ₦70 | ₦14,000 | Calculate the total cost of raw materials purchased during the month.
A. ₦28,000
B. ₦30,000
Correct C. ₦32,000
D. ₦35,000

Correct Answer: C

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Question 18
A company uses the single-entry system of accounting. The company's journal entry for the purchase of equipment on 1 Jan is: Debit: Equipment ₦100,000, Credit: Cash ₦100,000 On 15 Jan, the company sells the equipment for ₦120,000. Prepare the journal entry for the sale of equipment.
Correct A. Debit: Cash ₦120,000, Credit: Equipment ₦120,000
B. Debit: Equipment ₦120,000, Credit: Cash ₦120,000
C. Debit: Cash ₦120,000, Credit: Equipment ₦100,000
D. Debit: Equipment ₦100,000, Credit: Cash ₦120,000

Correct Answer: A

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Question 19
A company has the following trial balance: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦50,000 | ₦0 | | Accounts Payable | ₦0 | ₦20,000 | | Equipment | ₦100,000 | ₦0 | | Sales Revenue | ₦0 | ₦150,000 | | Cost of Goods Sold | ₦0 | ₦80,000 | Prepare the adjusted trial balance.
Correct A. Cash ₦50,000, Accounts Payable ₦20,000, Equipment ₦100,000, Sales Revenue ₦150,000, Cost of Goods Sold ₦80,000
B. Cash ₦50,000, Accounts Payable ₦20,000, Equipment ₦100,000, Sales Revenue ₦150,000, Cost of Goods Sold ₦80,000
C. Cash ₦50,000, Accounts Payable ₦20,000, Equipment ₦100,000, Sales Revenue ₦150,000, Cost of Goods Sold ₦80,000
D. Cash ₦50,000, Accounts Payable ₦20,000, Equipment ₦100,000, Sales Revenue ₦150,000, Cost of Goods Sold ₦80,000

Correct Answer: A

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Question 20
A company has the following transactions related to its public sector accounting: | Date | Description | Amount | | --- | --- | --- | | 1 Jan | Receipt from government | ₦100,000 | | 15 Jan | Payment to supplier | ₦50,000 | | 20 Jan | Receipt from government | ₦150,000 | Prepare the journal entry for the receipt from government on 20 Jan.
Correct A. Debit: Cash ₦150,000, Credit: Government ₦150,000
B. Debit: Government ₦150,000, Credit: Cash ₦150,000
C. Debit: Cash ₦150,000, Credit: Government ₦100,000
D. Debit: Government ₦100,000, Credit: Cash ₦150,000

Correct Answer: A

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Question 21
A company's cash book shows a credit balance of ₦15,000, while the bank statement shows a debit balance of ₦10,000. The bank reconciliation statement shows a difference of ₦5,000. What is the reason for this difference?
A. Bank charges
B. Interest on overdraft
C. Unrecorded deposit
Correct D. Unrecorded withdrawal

Correct Answer: D

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Question 22
A company uses the double entry system of accounting. The following transactions are recorded in the journal: Debit Cash ₦10,000, 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 equity
Correct D. Decreases liabilities and increases equity

Correct Answer: D

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Question 23
A company's trial balance shows the following balances: Accounts Payable ₦20,000, Sales Revenue ₦30,000. What is the effect of these balances on the accounting equation?
A. Increases assets and decreases liabilities
B. Decreases assets and increases liabilities
C. Increases liabilities and decreases equity
Correct D. Increases equity and decreases liabilities

Correct Answer: D

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Question 24
A company's balance sheet shows the following balances: Cash ₦15,000, Accounts Payable ₦20,000. What is the effect of these balances on the accounting equation?
A. Increases assets and decreases liabilities
B. Decreases assets and increases liabilities
C. Increases liabilities and decreases equity
Correct D. Increases equity and decreases liabilities

Correct Answer: D

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Question 25
A company's income statement shows the following balances: Sales Revenue ₦30,000, Cost of Goods Sold ₦20,000. What is the effect of these balances on the accounting equation?
A. Increases assets and decreases liabilities
B. Decreases assets and increases liabilities
C. Increases liabilities and decreases equity
Correct D. Increases equity and decreases liabilities

Correct Answer: D

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