POST UTME MOUNTAIN TOP UNIVERSITY 2018 Accounting | Objective

Are you preparing for POST UTME MOUNTAIN TOP 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.

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Question 1
A company issued 5,000, 10% debentures of ₦100 each at a discount of 5%. Calculate the amount received from debenture holders and the amount of discount on the debentures.
Correct A. ₦475,000
B. ₦450,000
C. ₦500,000
D. ₦525,000

Correct Answer: A

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Question 2
A firm has two partners, A and B, who share profits in the ratio 3:2. The capital of A is ₦60,000 and that of B is ₦40,000. Calculate the profit-sharing ratio of A and B.
Correct A. 3:2
B. 2:3
C. 4:3
D. 5:4

Correct Answer: A

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Question 3
A company purchased a machine for ₦120,000. Depreciation is calculated using the straight-line method. If the machine is expected to last for 5 years, calculate the annual depreciation.
Correct A. ₦24,000
B. ₦20,000
C. ₦18,000
D. ₦22,000

Correct Answer: A

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Question 4
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 ₦2,000. Calculate the correct cash balance.
Correct A. ₦57,000
B. ₦58,000
C. ₦59,000
D. ₦55,000

Correct Answer: A

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Question 5
A company issued 10,000, 5% preference shares of ₦10 each at a premium of ₦2. Calculate the amount received from shareholders and the amount of premium on the shares.
A. ₦100,000
Correct B. ₦110,000
C. ₦120,000
D. ₦130,000

Correct Answer: B

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Question 6
A company issued 10,000 shares of ₦ 1 each at a premium of ₦ 2. The shares were subscribed for by the public in full. Prepare the journal entry to record the issue of shares.
Correct A. Debit Share Capital ₦ 20,000, Credit Cash ₦ 20,000
B. Debit Share Capital ₦ 10,000, Credit Cash ₦ 10,000
C. Debit Share Capital ₦ 20,000, Credit Share Premium ₦ 20,000
D. Debit Share Capital ₦ 10,000, Credit Share Premium ₦ 10,000

Correct Answer: A

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Question 7
A company's trial balance showed a discrepancy of ₦ 1,000. The company's accountant suspected that the discrepancy was due to an error in the journal entry for the purchase of a piece of equipment. The accountant prepared the following schedule to investigate the error:
Correct A. The error is due to an error in the journal entry for the purchase of the equipment.
B. The error is due to an error in the trial balance.
C. The error is due to an error in the accounting equation.
D. The error is due to an error in the accounting records.

Correct Answer: A

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Question 8
A government agency is responsible for collecting taxes on behalf of the government. The agency's accounting records show the following transactions:
Correct A. Debit Tax Revenue ₦ 10,000, Credit Cash ₦ 10,000
B. Debit Cash ₦ 10,000, Credit Tax Revenue ₦ 10,000
C. Debit Tax Revenue ₦ 10,000, Credit Accounts Payable ₦ 10,000
D. Debit Accounts Payable ₦ 10,000, Credit Tax Revenue ₦ 10,000

Correct Answer: A

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Question 9
A company's cash book showed the following transactions:
Correct A. Debit Cash ₦ 10,000, Credit Bank ₦ 10,000
B. Debit Bank ₦ 10,000, Credit Cash ₦ 10,000
C. Debit Cash ₦ 10,000, Credit Accounts Payable ₦ 10,000
D. Debit Accounts Payable ₦ 10,000, Credit Cash ₦ 10,000

Correct Answer: A

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Question 10
A company's bank reconciliation statement showed a discrepancy of ₦ 1,000. 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 error:
Correct A. The error is due to an error in the bank statement.
B. The error is due to an error in the bank reconciliation statement.
C. The error is due to an error in the accounting records.
D. The error is due to an error in the company's accounting system.

Correct Answer: A

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Question 11
A company's trial balance shows a debit balance of ₦120,000 in the account 'Accrued Expenses' and a credit balance of ₦80,000 in the account 'Accrued Income'. What is the correct journal entry to eliminate the discrepancy?
A. ₦40,000 debit to Accrued Expenses and ₦40,000 credit to Accrued Income
B. ₦20,000 debit to Accrued Expenses and ₦20,000 credit to Accrued Income
C. ₦80,000 debit to Accrued Expenses and ₦120,000 credit to Accrued Income
Correct D. ₦120,000 debit to Accrued Expenses and ₦80,000 credit to Accrued Income

Correct Answer: D

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Question 12
A company purchases a machine for ₦500,000 and depreciates it using the straight-line method over a period of 5 years. If the machine is expected to have a residual value of ₦50,000 at the end of the 5-year period, what is the annual depreciation charge?
A. ₦80,000
B. ₦90,000
Correct C. ₦100,000
D. ₦110,000

Correct Answer: C

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Question 13
A company issues 10,000 shares of ₦1 each at a premium of ₦0.50 per share. If the company receives a cash payment of ₦10,000 for the issue of shares, what is the amount of share capital?
A. ₦10,000
B. ₦10,500
Correct C. ₦11,000
D. ₦11,500

Correct Answer: C

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Question 14
A government agency receives a grant of ₦1,000,000 to implement a project. If the agency incurs an expenditure of ₦800,000, what is the amount of unspent balance?
A. ₦100,000
B. ₦200,000
C. ₦300,000
Correct D. ₦400,000

Correct Answer: D

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Question 15
A company purchases a machine for ₦500,000 and depreciates it using the reducing balance method. If the machine is expected to have a residual value of ₦50,000 at the end of the 5-year period, what is the annual depreciation charge?
A. ₦90,000
B. ₦100,000
Correct C. ₦110,000
D. ₦120,000

Correct Answer: C

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Question 16
A company issued 10,000 shares of ₦ 1 each at a premium of ₦ 2 per share. The company's issued share capital is ₦ 120,000. What is the amount received from the issue of shares?
A. ₦ 100,000
Correct B. ₦ 120,000
C. ₦ 140,000
D. ₦ 160,000

Correct Answer: B

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Question 17
A company's assets are valued at ₦ 500,000. The company's liabilities are ₦ 200,000. What is the company's net worth?
A. ₦ 300,000
B. ₦ 400,000
Correct C. ₦ 500,000
D. ₦ 600,000

Correct Answer: C

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Question 18
A company's depreciation on a machine is ₦ 10,000 per year. The machine was purchased for ₦ 50,000. What is the machine's book value after 5 years?
A. ₦ 20,000
B. ₦ 30,000
Correct C. ₦ 40,000
D. ₦ 50,000

Correct Answer: C

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Question 19
A company issued 5,000 shares of ₦ 1 each at a premium of ₦ 1 per share. The company's issued share capital is ₦ 25,000. What is the amount received from the issue of shares?
A. ₦ 20,000
Correct B. ₦ 25,000
C. ₦ 30,000
D. ₦ 35,000

Correct Answer: B

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Question 20
A company's assets are valued at ₦ 1,000,000. The company's liabilities are ₦ 500,000. What is the company's net worth?
A. ₦ 500,000
B. ₦ 750,000
Correct C. ₦ 1,000,000
D. ₦ 1,250,000

Correct Answer: C

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Question 21
The trial balance of XYZ Ltd. shows the following balances:
A. ₦125,000
Correct B. ₦150,000
C. ₦175,000
D. ₦200,000

Correct Answer: B

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Question 22
A company's cash book shows the following transactions:
A. ₦50,000
B. ₦75,000
Correct C. ₦100,000
D. ₦125,000

Correct Answer: C

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Question 23
The following is a diagram of a manufacturing process:
A. ₦50,000
B. ₦75,000
C. ₦100,000
Correct D. ₦125,000

Correct Answer: D

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Question 24
The following is a statement of cash flows:
A. ₦50,000
B. ₦75,000
Correct C. ₦100,000
D. ₦125,000

Correct Answer: C

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Question 25
The following is a balance sheet:
A. ₦50,000
B. ₦75,000
C. ₦100,000
Correct D. ₦125,000

Correct Answer: D

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