POST UTME JOSEPH AYO BABALOLA UNIVERSITY 2021 Accounting | Objective

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Question 1
A company's trial balance shows a debit balance of ₦15,000 in the 'Rent Expense' account. However, the company's financial records show that it has paid ₦20,000 in rent for the year. What is the correct journal entry to record the discrepancy?
A. ₦15,000 debit to 'Rent Expense' and ₦20,000 credit to 'Cash'
B. ₦5,000 debit to 'Rent Expense' and ₦5,000 credit to 'Cash'
Correct C. ₦20,000 debit to 'Rent Expense' and ₦15,000 credit to 'Cash'
D. ₦15,000 credit to 'Rent Expense' and ₦20,000 debit to 'Cash'

Correct Answer: C

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Question 2
A company's balance sheet shows a current asset of ₦50,000 in the 'Accounts Receivable' account. However, the company's financial records show that it has received ₦60,000 in cash from customers. What is the correct journal entry to record the discrepancy?
A. ₦10,000 debit to 'Accounts Receivable' and ₦10,000 credit to 'Cash'
B. ₦60,000 debit to 'Accounts Receivable' and ₦50,000 credit to 'Cash'
C. ₦50,000 debit to 'Accounts Receivable' and ₦60,000 credit to 'Cash'
Correct D. ₦60,000 debit to 'Cash' and ₦50,000 credit to 'Accounts Receivable'

Correct Answer: D

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Question 3
A company's financial records show that it has purchased a piece of equipment for ₦100,000. However, the company's trial balance shows a debit balance of ₦80,000 in the 'Equipment' account. What is the correct journal entry to record the discrepancy?
A. ₦20,000 debit to 'Equipment' and ₦20,000 credit to 'Cash'
B. ₦80,000 debit to 'Equipment' and ₦100,000 credit to 'Cash'
Correct C. ₦100,000 debit to 'Equipment' and ₦80,000 credit to 'Cash'
D. ₦20,000 credit to 'Equipment' and ₦20,000 debit to 'Cash'

Correct Answer: C

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Question 4
A company's financial records show that it has sold a piece of equipment for ₦80,000. However, the company's trial balance shows a debit balance of ₦100,000 in the 'Equipment' account. What is the correct journal entry to record the discrepancy?
A. ₦20,000 debit to 'Equipment' and ₦20,000 credit to 'Cash'
B. ₦100,000 debit to 'Equipment' and ₦80,000 credit to 'Cash'
Correct C. ₦80,000 debit to 'Equipment' and ₦100,000 credit to 'Cash'
D. ₦20,000 credit to 'Equipment' and ₦20,000 debit to 'Cash'

Correct Answer: C

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Question 5
A company's financial records show that it has purchased a piece of equipment for ₦100,000. However, the company's trial balance shows a debit balance of ₦80,000 in the 'Equipment' account. What is the correct journal entry to record the discrepancy?
A. ₦20,000 debit to 'Equipment' and ₦20,000 credit to 'Cash'
B. ₦80,000 debit to 'Equipment' and ₦100,000 credit to 'Cash'
Correct C. ₦100,000 debit to 'Equipment' and ₦80,000 credit to 'Cash'
D. ₦20,000 credit to 'Equipment' and ₦20,000 debit to 'Cash'

Correct Answer: C

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Question 6
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 earns 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 7
A public sector organization has the following transactions in its cash book: Debit: ₦100,000, Credit: ₦120,000. What is the balance in the cash book?
Correct A. ₦20,000
B. ₦10,000
C. ₦30,000
D. ₦40,000

Correct Answer: A

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Question 8
A manufacturing company has the following departmental accounts: Production Department: ₦500,000, Sales Department: ₦300,000. What is the total profit of the company?
Correct A. ₦800,000
B. ₦700,000
C. ₦600,000
D. ₦900,000

Correct Answer: A

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Question 9
A bank reconciliation statement shows a difference of ₦5,000 between the cash book balance and the bank statement balance. What is the reason for this difference?
A. Bank error
B. Cash book error
Correct C. Cheque not yet cleared
D. Deposit not yet credited

Correct Answer: C

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Question 10
A company has the following control account: Sales Ledger: ₦500,000, Purchase Ledger: ₦300,000. What is the total value of the company's assets?
Correct A. ₦800,000
B. ₦700,000
C. ₦600,000
D. ₦900,000

Correct Answer: A

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Question 11
A company issued 5,000, 10% debentures of ₦100 each at a discount of 5%. The debentures are redeemable after 5 years. Calculate the amount of discount on the debentures.
A. ₦250,000
Correct B. ₦500,000
C. ₦750,000
D. ₦1,000,000

Correct Answer: B

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Question 12
A partnership is formed between two partners, A and B, with a capital of ₦200,000 and ₦300,000 respectively. After 2 years, A withdraws ₦50,000 and B adds ₦20,000. Calculate the new capital of the partnership.
A. ₦400,000
B. ₦450,000
Correct C. ₦500,000
D. ₦550,000

Correct Answer: C

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Question 13
A company issues 10,000 shares of ₦10 each at a premium of ₦5. Calculate the total amount received from the issue of shares.
A. ₦150,000
B. ₦200,000
Correct C. ₦250,000
D. ₦300,000

Correct Answer: C

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Question 14
A company has a trial balance as follows: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦100,000 | | | Accounts Payable | | ₦50,000 | | Sales | | ₦200,000 | | Cost of Goods Sold | ₦150,000 | | | Net Income | | ₦50,000 | Identify the error in the trial balance.
A. Cash account has a debit balance
B. Accounts Payable account has a credit balance
Correct C. Sales account has a credit balance
D. Cost of Goods Sold account has a debit balance

Correct Answer: C

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Question 15
A company has the following transactions: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | ₦100,000 | | | 2 Jan | Accounts Payable | | ₦50,000 | | 3 Jan | Sales | | ₦200,000 | | 4 Jan | Cost of Goods Sold | ₦150,000 | | | 5 Jan | Net Income | | ₦50,000 | Prepare the journal entries for the transactions.
Correct A. Jan 1: Cash | ₦100,000 | Accounts Payable | ₦50,000 Jan 2: Sales | ₦200,000 | Cost of Goods Sold | ₦150,000 Jan 3: Net Income | ₦50,000 |
B. Jan 1: Cash | ₦100,000 | Accounts Payable | ₦50,000 Jan 2: Sales | ₦200,000 | Cost of Goods Sold | ₦150,000 Jan 3: Net Income | ₦50,000 |
C. Jan 1: Cash | ₦100,000 | Accounts Payable | ₦50,000 Jan 2: Sales | ₦200,000 | Cost of Goods Sold | ₦150,000 Jan 3: Net Income | ₦50,000 |
D. Jan 1: Cash | ₦100,000 | Accounts Payable | ₦50,000 Jan 2: Sales | ₦200,000 | Cost of Goods Sold | ₦150,000 Jan 3: Net Income | ₦50,000 |

Correct Answer: A

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Question 16
A company issues 10,000, 10% debentures of ₦100 each at a premium of 10%. The debentures are redeemable at the end of 5 years. Calculate the amount of interest to be paid annually.
A. ₦10,000
Correct B. ₦20,000
C. ₦30,000
D. ₦40,000

Correct Answer: B

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Question 17
A partnership is formed between two partners, A and B, who invest ₦50,000 and ₦30,000 respectively. The profit is divided in the ratio 2:1. If the profit for the year is ₦60,000, calculate the share of profit of partner A.
Correct A. ₦20,000
B. ₦30,000
C. ₦40,000
D. ₦50,000

Correct Answer: A

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Question 18
A company maintains a self-balancing ledger for its sales and purchases. The ledger shows a debit balance of ₦50,000. If the company's sales for the year are ₦200,000 and its purchases are ₦150,000, calculate the amount of cash received from customers.
A. ₦50,000
B. ₦75,000
Correct C. ₦100,000
D. ₦125,000

Correct Answer: C

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Question 19
A company's trial balance shows a discrepancy of ₦10,000 between the debit and credit balances. The company's accountant suspects that the discrepancy is due to an error in the journal entries. Calculate the amount of the error.
A. ₦5,000
Correct B. ₦10,000
C. ₦15,000
D. ₦20,000

Correct Answer: B

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Question 20
A company's incomplete records show the following transactions: Cash received from customers ₦100,000, Cash paid to suppliers ₦50,000, and Cash paid to employees ₦20,000. Calculate the company's net cash inflow.
A. ₦30,000
B. ₦40,000
Correct C. ₦50,000
D. ₦60,000

Correct Answer: C

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Question 21
A company uses the double entry system to record its transactions. The company's ledger account for 'Office Equipment' shows a debit balance of ₦120,000. The company's trial balance also shows a credit balance of ₦120,000 for 'Office Equipment'. What is the correct journal entry to record the purchase of office equipment?
Correct A. Debit Office Equipment ₦120,000, Credit Cash ₦120,000
B. Debit Office Equipment ₦120,000, Credit Bank ₦120,000
C. Debit Office Equipment ₦120,000, Credit Office Supplies ₦120,000
D. Debit Office Equipment ₦120,000, Credit Office Expenses ₦120,000

Correct Answer: A

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Question 22
A company's assets are valued at ₦1,500,000. The company's liabilities are ₦800,000. What is the company's equity?
A. ₦700,000
Correct B. ₦1,000,000
C. ₦1,300,000
D. ₦1,700,000

Correct Answer: B

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Question 23
A company's financial statements show a net income of ₦200,000. The company's balance sheet shows a total assets of ₦1,500,000 and total liabilities of ₦800,000. What is the company's equity?
A. ₦700,000
B. ₦1,000,000
Correct C. ₦1,300,000
D. ₦1,700,000

Correct Answer: C

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Question 24
A company's financial statements show a net income of ₦200,000. The company's balance sheet shows a total assets of ₦1,500,000 and total liabilities of ₦800,000. What is the company's return on equity?
A. 10%
Correct B. 20%
C. 30%
D. 40%

Correct Answer: B

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Question 25
A company's financial statements show a net income of ₦200,000. The company's balance sheet shows a total assets of ₦1,500,000 and total liabilities of ₦800,000. What is the company's debt-to-equity ratio?
A. 1:1
B. 1:2
Correct C. 2:1
D. 3:1

Correct Answer: C

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