POST UTME MADONNA UNIVERSITY 2018 Accounting | Objective

Are you preparing for POST UTME MADONNA UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2018 Accounting (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a partnership account, what is the correct method of calculating the capital of a partner who has been absent for a year?
Correct A. Capital is calculated as the average of the partner's capital for the previous year and the current year.
B. Capital is calculated as the partner's capital for the previous year minus any drawings made during the year.
C. Capital is calculated as the partner's capital for the previous year plus any profits made during the year.
D. Capital is calculated as the average of the partner's capital for the previous year and the current year, minus any drawings made during the year.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 2
A company uses the straight-line method of depreciation. If the asset's useful life is 5 years and the residual value is ₦50,000, what is the annual depreciation charge if the asset cost ₦300,000?
Correct A. ₦40,000
B. ₦50,000
C. ₦60,000
D. ₦70,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 3
A company's trial balance shows a discrepancy of ₦10,000. The company's accountant suspects that the error is due to an incorrect posting of a transaction. What is the correct procedure to follow?
A. Prepare a revised trial balance and compare it with the original trial balance.
Correct B. Investigate the transaction that was incorrectly posted and correct the error.
C. Prepare a suspense account to account for the discrepancy.
D. Ignore the discrepancy and proceed with the financial statements.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 4
A company uses the perpetual inventory system. If the company purchases 100 units of inventory at ₦50 each, and the previous inventory balance was 50 units at ₦40 each, what is the total value of the inventory?
A. ₦6,500
B. ₦7,000
C. ₦7,500
Correct D. ₦8,000

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 5
A company's financial statements show a net income of ₦100,000. If the company's tax rate is 25%, what is the amount of income tax payable?
A. ₦20,000
Correct B. ₦25,000
C. ₦30,000
D. ₦35,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 6
A company issued 10,000, 10% debentures of ₦100 each at a discount of 5%. Calculate the amount received from the debenture holders.
A. ₦950,000
B. ₦1,000,000
Correct C. ₦1,050,000
D. ₦1,100,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 7
A firm has a cash book balance of ₦50,000. The bank statement shows a balance of ₦60,000. The firm's cash book shows a debit balance of ₦5,000. The bank statement shows a credit balance of ₦3,000. What is the correct balance of the firm's cash book?
A. ₦55,000
Correct B. ₦57,000
C. ₦59,000
D. ₦61,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 8
A company has the following ledger balances: Capital: ₦100,000; Profit: ₦20,000; Drawings: ₦10,000. Prepare the trial balance.
A. Capital: ₦100,000; Profit: ₦20,000; Drawings: ₦10,000
B. Capital: ₦90,000; Profit: ₦30,000; Drawings: ₦0
C. Capital: ₦110,000; Profit: ₦20,000; Drawings: ₦10,000
Correct D. Capital: ₦100,000; Profit: ₦20,000; Drawings: ₦10,000

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 9
A partnership has two partners, A and B. A has a 60% interest in the partnership and B has a 40% interest. The partnership has a profit of ₦100,000. Calculate the share of profit of each partner.
Correct A. A: ₦60,000; B: ₦40,000
B. A: ₦40,000; B: ₦60,000
C. A: ₦50,000; B: ₦50,000
D. A: ₦0; B: ₦100,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 10
A company issued 10,000, 10% debentures of ₦100 each at a discount of 5%. Calculate the amount received from the debenture holders.
A. ₦950,000
B. ₦1,000,000
Correct C. ₦1,050,000
D. ₦1,100,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 11
A company's accounting policy requires that all assets be recorded at their historical cost. However, the company has a policy of revaluing its property, plant, and equipment (PPE) every five years. If the company revalues its PPE at the end of the current year, which of the following is the correct accounting treatment?
A. Recognize the revaluation gain as income in the current year.
Correct B. Recognize the revaluation gain as a capital reserve.
C. Recognize the revaluation gain as a revenue reserve.
D. Recognize the revaluation gain as a decrease in retained earnings.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 12
A manufacturing company uses a job costing system. The company has the following costs associated with a particular job: direct materials 10,000, direct labor 15,000, and overhead 20,000. What is the total cost of the job?
A. 45,000
B. 50,000
Correct C. 55,000
D. 60,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 13
A company's balance sheet at the end of the year shows total assets of ₦500,000, total liabilities of ₦200,000, and total equity of ₦300,000. If the company issues 10,000 shares of stock at ₦20 per share, what is the new total equity?
A. ₦350,000
B. ₦360,000
C. ₦370,000
Correct D. ₦380,000

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 14
A company's cash book shows the following transactions: deposit of ₦10,000, withdrawal of ₦5,000, and payment of ₦8,000 to a supplier. What is the new balance in the cash account?
Correct A. ₦13,000
B. ₦12,000
C. ₦11,000
D. ₦10,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 15
A company's trial balance shows the following accounts: Sales ₦500,000, Cost of Goods Sold ₦300,000, and Net Income ₦200,000. What is the gross profit?
A. ₦200,000
Correct B. ₦250,000
C. ₦300,000
D. ₦350,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 16
A company issued 5,000, 10% debentures of ₦100 each. The debentures are redeemable at the end of 5 years. Calculate the annual charge for interest on the debentures.
A. ₦50,000
B. ₦25,000
Correct C. ₦12,500
D. ₦62,500

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 17
A company's profit and loss account for the year ended 31st December 2018 is as follows: Revenue: ₦1,500,000 Cost of Goods Sold: ₦1,200,000 Gross Profit: ₦300,000 Selling and Distribution Expenses: ₦120,000 Operating Profit: ₦180,000 Interest Received: ₦20,000 Interest Paid: ₦30,000 Profit Before Tax: ₦150,000 Tax: ₦30,000 Profit After Tax: ₦120,000 Calculate the company's return on equity.
Correct A. 12%
B. 15%
C. 18%
D. 20%

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 18
A company's balance sheet as at 31st December 2018 is as follows: Assets: ₦1,500,000 Liabilities: ₦1,200,000 Equity: ₦300,000 Calculate the company's current ratio.
A. 1.25
Correct B. 1.5
C. 1.75
D. 2.0

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 19
A company issued 5,000, 10% debentures of ₦100 each. The debentures are redeemable at the end of 5 years. Calculate the total amount to be paid to the debenture holders at redemption.
Correct A. ₦500,000
B. ₦500,000
C. ₦500,000
D. ₦500,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 20
A company's profit and loss account for the year ended 31st December 2018 is as follows: Revenue: ₦1,500,000 Cost of Goods Sold: ₦1,200,000 Gross Profit: ₦300,000 Selling and Distribution Expenses: ₦120,000 Operating Profit: ₦180,000 Interest Received: ₦20,000 Interest Paid: ₦30,000 Profit Before Tax: ₦150,000 Tax: ₦30,000 Profit After Tax: ₦120,000 Calculate the company's net profit margin.
A. 8%
B. 10%
Correct C. 12%
D. 15%

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 21
A company produces two products, X and Y, using two machines, A and B. The production process for X requires 2 hours on machine A and 3 hours on machine B, while the production process for Y requires 3 hours on machine A and 2 hours on machine B. If machine A operates for 12 hours and machine B operates for 15 hours, how many units of product X and Y should the company produce to maximize profit?
A. 10 units of X and 15 units of Y
Correct B. 15 units of X and 10 units of Y
C. 20 units of X and 5 units of Y
D. 5 units of X and 20 units of Y

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 22
A company has two departments, A and B. Department A has a budget of ₦1,500,000 and department B has a budget of ₦2,000,000. If department A spends ₦1,200,000 and department B spends ₦1,800,000, what is the total amount spent by the company?
A. ₦3,000,000
B. ₦3,500,000
Correct C. ₦4,000,000
D. ₦4,500,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 23
A company has a cash book that shows a balance of ₦500,000. However, the company's bank statement shows a balance of ₦600,000. What is the reason for the difference?
A. The company has a loan from the bank
B. The company has a deposit in the bank
Correct C. The company has a cheque outstanding
D. The company has a credit note from the bank

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 24
A government agency has a budget of ₦10,000,000 for a project. The project requires a cash outlay of ₦5,000,000 and a non-cash outlay of ₦3,000,000. What is the total amount of the project?
A. ₦8,000,000
Correct B. ₦10,000,000
C. ₦12,000,000
D. ₦15,000,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 25
A company has a trial balance that shows a debit balance of ₦500,000. However, the company's ledger accounts show a credit balance of ₦600,000. What is the reason for the difference?
A. The company has a loan from a shareholder
B. The company has a deposit in a bank
C. The company has a cheque outstanding
Correct D. The company has a credit note from a supplier

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Help others prepare! Share this practice hub:
Chat with Support