POST UTME MOUNTAIN TOP UNIVERSITY 2025 Accounting | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company's Balance Sheet shows a current liability of ₦50,000. What is the effect of this liability on the company's liquidity position?
A. Increases liquidity
B. Decreases liquidity
C. No effect on liquidity
D. Unknown effect on liquidity
Question 2
A company issued 10,000 shares of ₦1 each at a premium of ₦0.50 per share. The shares were issued for ₦1,000,000. Prepare the journal entry for the issue of shares, assuming the company uses the cost method of accounting.
A. Debit Share Capital ₦1,000,000, Credit Cash ₦1,000,000
B. Debit Share Capital ₦1,000,000, Credit Cash ₦0,500,000
C. Debit Share Capital ₦0,500,000, Credit Cash ₦1,000,000
D. Debit Share Capital ₦0,500,000, Credit Cash ₦0,500,000
Question 3
A partnership has two partners, A and B, who share profits and losses in the ratio 3:2. The partnership's profit for the year is ₦240,000. Calculate the amount of profit that will be distributed to partner A.
A. ₦180,000
B. ₦200,000
C. ₦220,000
D. ₦240,000
Question 4
A company's balance sheet shows a current ratio of 2:1. If the company's current assets are ₦100,000 and its current liabilities are ₦50,000, what is the correct interpretation of this ratio?
A. The company has sufficient liquidity to meet its short-term obligations.
B. The company has insufficient liquidity to meet its short-term obligations.
C. The company has a moderate level of liquidity.
D. The company has a high level of liquidity.
Question 5
A company's trial balance shows a debit balance of ₦15,000 in the account 'Rent Received'. What is the correct treatment of this account in the final accounts?
A. Debit side of the Profit and Loss Account
B. Credit side of the Profit and Loss Account
C. Debit side of the Balance Sheet
D. Credit side of the Balance Sheet
Question 6
A company's trial balance shows a discrepancy of ₦5,000. The accountant suspects an error in the posting of a transaction. The transaction involved the sale of goods for ₦20,000, with a cash receipt of ₦15,000 and a credit to accounts receivable for ₦5,000. The error is most likely due to the
A. incorrect posting of the sale of goods
B. incorrect posting of the cash receipt
C. incorrect posting of the credit to accounts receivable
D. incorrect posting of the debit to accounts payable
Question 7
A company issued 10,000 shares of ₦1 each at a premium of ₦0.50 per share. The shares were issued for ₦1,000,000. Prepare the ledger accounts for the issue of shares.
A. Debit Share Capital ₦1,000,000, Credit Cash ₦1,000,000
B. Debit Share Capital ₦1,000,000, Credit Cash ₦0,500,000
C. Debit Share Capital ₦0,500,000, Credit Cash ₦1,000,000
D. Debit Share Capital ₦0,500,000, Credit Cash ₦0,500,000
Question 8
In a partnership account, the capital of one partner is increased by ₦50,000 and the capital of another partner is decreased by ₦30,000. What is the net effect on the total capital of the partnership?
A. ₦20,000 increase
B. ₦20,000 decrease
C. ₦20,000 no change
D. ₦20,000 unknown
Question 9
A company uses the double-entry system to record its transactions. If the company purchases office equipment for ₦50,000, what is the effect on the accounting equation?
A. Assets increase, Liabilities increase
B. Assets increase, Liabilities decrease
C. Assets decrease, Liabilities increase
D. Assets decrease, Liabilities decrease
Question 10
A company uses the percentage of completion method to account for construction contracts. At the end of the current year, the company has completed 75% of the contract. The total contract price is ₦1,500,000, and the company has incurred costs of ₦1,125,000. Calculate the profit recognized for the year.
A. ₦562,500
B. ₦625,000
C. ₦687,500
D. ₦750,000
Question 11
In a partnership account, what is the correct method of calculating the capital of a partner who has been absent for the past three years?
A. Capital is calculated based on the partner's last known balance.
B. Capital is calculated based on the partner's average balance over the past three years.
C. Capital is calculated based on the partner's current balance.
D. Capital is calculated based on the partner's initial investment.
Question 12
A company's bank reconciliation statement shows a difference of ₦10,000 between the bank's balance and the company's balance. The company's balance is ₦50,000, and the bank's balance is ₦40,000. The difference is most likely due to
A. unrecorded deposits
B. unrecorded withdrawals
C. incorrect bank balance
D. incorrect company balance
Question 13
Two partners, A and B, share profits and losses in the ratio 3:2. The capital of A is ₦60,000, and the capital of B is ₦40,000. The total profit for the year is ₦100,000. The share of profit of A is
A. ₦60,000
B. ₦50,000
C. ₦40,000
D. ₦30,000
Question 14
A public sector organization has a budget of ₦1,000,000 for a project. If the actual expenditure is ₦800,000, what is the variance?
A. ₦100,000
B. ₦200,000
C. ₦300,000
D. ₦400,000
Question 15
A company's Balance Sheet shows a non-current asset of ₦100,000. What is the effect of this asset on the company's liquidity position?
A. Increases liquidity
B. Decreases liquidity
C. No effect on liquidity
D. Unknown effect on liquidity

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