POST UTME MOUNTAIN TOP UNIVERSITY 2018 Accounting | Objective

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Question 1
A company uses the double-entry system of accounting. The company's ledger shows a debit balance of ₦15,000 in the account 'Purchases' and a credit balance of ₦10,000 in the account 'Sales'. What is the correct journal entry to record the transaction?
A. ₦15,000 debit to Sales and ₦10,000 credit to Purchases
B. ₦15,000 credit to Sales and ₦10,000 debit to Purchases
C. ₦15,000 debit to Purchases and ₦10,000 credit to Sales
D. ₦15,000 credit to Purchases and ₦10,000 debit to Sales
Question 2
A company uses the single-entry system of accounting. The company's cash book shows a balance of ₦12,500. The bank statement shows a balance of ₦10,500. The company's cash book also shows a debit balance of ₦2,000 in the account 'Office Equipment'. The bank statement shows a credit balance of ₦1,500 in the same account. What is the correct journal entry to reconcile the cash book and bank statement?
A. ₦2,000 debit to Cash and ₦1,500 credit to Office Equipment
B. ₦2,000 credit to Cash and ₦1,500 debit to Office Equipment
C. ₦2,000 debit to Office Equipment and ₦1,500 credit to Cash
D. ₦2,000 credit to Office Equipment and ₦1,500 debit to Cash
Question 3
A bank's cash book shows the following transactions: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash received from customers | ₦150,000 | | | 1 Jan | Cash paid to suppliers | | ₦100,000 | | 1 Jan | Cash paid to employees | | ₦30,000 | | 1 Jan | Cash received from government grant | ₦60,000 | | What is the bank's cash balance at the end of the first day?
A. ₦80,000
B. ₦110,000
C. ₦140,000
D. ₦170,000
Question 4
A company's trial balance shows a credit balance of ₦20,000 in the 'Dividends' account. However, the company's accounting records show that it has declared a dividend of ₦15,000. What is the correct journal entry to record the dividend?
A. ₦15,000 debit to Dividends, ₦15,000 credit to Retained Earnings
B. ₦15,000 debit to Retained Earnings, ₦15,000 credit to Dividends
C. ₦20,000 debit to Dividends, ₦20,000 credit to Retained Earnings
D. ₦20,000 debit to Retained Earnings, ₦20,000 credit to Dividends
Question 5
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.
A. ₦475,000
B. ₦450,000
C. ₦500,000
D. ₦525,000
Question 6
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.
A. ₦57,000
B. ₦58,000
C. ₦59,000
D. ₦55,000
Question 7
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
B. ₦110,000
C. ₦120,000
D. ₦130,000
Question 8
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
B. ₦ 120,000
C. ₦ 140,000
D. ₦ 160,000
Question 9
A company's asset is depreciated using the straight-line method. The asset's cost is ₦200,000, and its useful life is 5 years. What is the annual depreciation charge?
A. ₦20,000
B. ₦40,000
C. ₦60,000
D. ₦80,000
Question 10
A company's financial statements show the following: | Asset | 2022 | 2023 | | --- | --- | --- | | Cash | ₦100,000 | ₦120,000 | | Accounts Receivable | ₦80,000 | ₦90,000 | | Inventory | ₦150,000 | ₦180,000 | | Total Assets | ₦330,000 | ₦390,000 | What is the company's total asset increase from 2022 to 2023?
A. ₦60,000
B. ₦80,000
C. ₦100,000
D. ₦120,000
Question 11
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
C. ₦100,000
D. ₦110,000
Question 12
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
C. ₦ 40,000
D. ₦ 50,000
Question 13
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
C. ₦ 1,000,000
D. ₦ 1,250,000
Question 14
The following is a diagram of a manufacturing process:
A. ₦50,000
B. ₦75,000
C. ₦100,000
D. ₦125,000
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
C. ₦110,000
D. ₦120,000

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