POST UTME PAN-ATLANTIC UNIVERSITY 2017 Accounting | Objective

Are you preparing for POST UTME PAN-ATLANTIC UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2017 Accounting (Objective) questions designed to simulate the real exam environment.

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Question 1
A company's trial balance shows an error of ₦5,000 in the debit side of the purchases account. The correct figure is ₦1,50,000. What is the effect of this error on the net profit?
A. Increases the net profit by ₦5,000
Correct B. Decreases the net profit by ₦5,000
C. Increases the net profit by ₦ 50,000
D. Decreases the net profit by ₦ 50,000

Correct Answer: B

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Question 2
A partnership has two partners, A and B. The capital accounts of A and B are ₦1,00,000 and ₦1,50,000 respectively. The profit-sharing ratio is 3:2. What is the ratio of the distribution of the profit?
Correct A. 3:2
B. 2:3
C. 1:1
D. 3:1

Correct Answer: A

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Question 3
A company issues 10,000, 10% debentures of ₦10 each at a discount of 5%. The company receives ₦ 9,500 per debenture. What is the amount of discount on the debentures?
A. ₦ 10,000
B. ₦ 50,000
C. ₦ 1,00,000
Correct D. ₦ 5,00,000

Correct Answer: D

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Question 4
A company's trial balance shows an error of ₦5,000 in the debit side of the purchases account. The correct figure is ₦1,50,000. What is the effect of this error on the net profit?
A. Increases the net profit by ₦5,000
Correct B. Decreases the net profit by ₦5,000
C. Increases the net profit by ₦ 50,000
D. Decreases the net profit by ₦ 50,000

Correct Answer: B

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Question 5
A company's trial balance shows an error of ₦5,000 in the debit side of the purchases account. The correct figure is ₦1,50,000. What is the effect of this error on the net profit?
A. Increases the net profit by ₦5,000
Correct B. Decreases the net profit by ₦5,000
C. Increases the net profit by ₦ 50,000
D. Decreases the net profit by ₦ 50,000

Correct Answer: B

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Question 6
A company has two departments: Manufacturing and Sales. The Manufacturing department has a budget of ₦1,500,000 for the year, which includes a 10% contingency fund. The Sales department has a budget of ₦2,000,000, which includes a 5% contingency fund. What is the total budget for both departments, including contingency funds?
A. ₦3,500,000
B. ₦3,600,000
C. ₦3,800,000
Correct D. ₦4,000,000

Correct Answer: D

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Question 7
A company uses the double-entry system of accounting. The company's trial balance shows the following balances: Accounts Payable ₦50,000, Sales Revenue ₦200,000, Cost of Goods Sold ₦100,000, and Common Stock ₦150,000. What is the net income of the company?
A. ₦50,000
B. ₦75,000
C. ₦100,000
Correct D. ₦125,000

Correct Answer: D

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Question 8
A company has the following transactions: Purchased office supplies for ₦10,000, Sold goods for ₦50,000, and Paid rent for ₦20,000. What is the total amount of cash outflows?
A. ₦30,000
B. ₦40,000
C. ₦50,000
Correct D. ₦60,000

Correct Answer: D

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Question 9
A company has two partners: A and B. Partner A invested ₦100,000 and Partner B invested ₦50,000. The company's profit is ₦20,000. What is the ratio of Partner A's share to Partner B's share?
Correct A. 2:1
B. 3:1
C. 4:1
D. 5:1

Correct Answer: A

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Question 10
A company has the following ledger accounts: Cash ₦50,000, Accounts Payable ₦20,000, Sales Revenue ₦100,000, and Cost of Goods Sold ₦50,000. What is the net income of the company?
A. ₦30,000
B. ₦40,000
C. ₦50,000
Correct D. ₦60,000

Correct Answer: D

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Question 11
A company's manufacturing overheads for the year ended 31st December 2017 were as follows: Direct Labour: ₦1,200,000 Indirect Labour: ₦800,000 Rent: ₦500,000 Depreciation: ₦300,000 Insurance: ₦200,000 Total: ₦2,500,000 Calculate the manufacturing overheads as a percentage of prime cost.
A. 15%
Correct B. 20%
C. 25%
D. 30%

Correct Answer: B

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Question 12
A company's trading account for the year ended 31st December 2017 is as follows: Sales: ₦5,000,000 Purchases: ₦3,500,000 Cost of Goods Sold: ₦4,000,000 Gross Profit: ₦1,000,000 Calculate the gross profit percentage.
Correct A. 20%
B. 25%
C. 30%
D. 35%

Correct Answer: A

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Question 13
A company issued 10,000 shares of ₦10 each at a premium of ₦5 per share. The company also issued 5,000 debentures of ₦100 each. Calculate the total amount received from the issue of shares and debentures.
A. ₦1,500,000
Correct B. ₦1,600,000
C. ₦1,700,000
D. ₦1,800,000

Correct Answer: B

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Question 14
A company's balance sheet as at 31st December 2017 is as follows: Assets: ₦10,000,000 Liabilities: ₦5,000,000 Capital: ₦3,000,000 Calculate the current ratio.
A. 2:1
Correct B. 3:1
C. 4:1
D. 5:1

Correct Answer: B

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Question 15
A company's control account for the year ended 31st December 2017 is as follows: Purchases: ₦5,000,000 Sales: ₦10,000,000 Cost of Goods Sold: ₦8,000,000 Calculate the balance of the control account.
A. ₦2,000,000
B. ₦3,000,000
Correct C. ₦4,000,000
D. ₦5,000,000

Correct Answer: C

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Question 16
A government agency is considering the adoption of a new accounting system. The agency's current system is based on cash accounting, while the proposed system is based on accrual accounting. Which of the following is a key advantage of accrual accounting?
Correct A. Improved financial reporting
B. Increased transparency
C. Enhanced decision-making
D. Reduced accounting costs

Correct Answer: A

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Question 17
A company's cash book shows a balance of ₦500,000. The company's bank statement shows a balance of ₦550,000. What is the reason for the difference?
A. Bank charges
B. Interest earned
C. Deposits in transit
Correct D. Cheques outstanding

Correct Answer: D

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Question 18
A company's trading account shows a profit of ₦200,000. The company's profit and loss account shows a profit of ₦250,000. What is the reason for the difference?
A. Depreciation
B. Interest on loans
C. Dividends paid
Correct D. Taxation

Correct Answer: D

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Question 19
A company's balance sheet shows a current ratio of 2:1. What does this indicate?
Correct A. Good liquidity position
B. Poor liquidity position
C. High level of gearing
D. Low level of gearing

Correct Answer: A

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Question 20
A company's balance sheet shows a debt-to-equity ratio of 1:1. What does this indicate?
A. High level of gearing
Correct B. Low level of gearing
C. Good capital structure
D. Poor capital structure

Correct Answer: B

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Question 21
A company issued 10,000 shares of 1 par value at a premium of 3 per share. The proceeds from the issue were credited to a share capital account. Prepare the journal entry for the issue of shares.
Correct A. Debit Share Capital 30,000, Credit Cash 30,000
B. Debit Share Capital 30,000, Credit Cash 40,000
C. Debit Share Capital 40,000, Credit Cash 30,000
D. Debit Share Capital 40,000, Credit Cash 40,000

Correct Answer: A

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Question 22
A company has the following transactions: Purchased office equipment for 5,000, paid 2,000 cash, and borrowed 3,000 from a bank. Prepare the journal entries for these transactions.
Correct A. Debit Office Equipment 5,000, Credit Cash 2,000, Credit Bank Loan 3,000
B. Debit Office Equipment 5,000, Credit Cash 5,000
C. Debit Office Equipment 5,000, Credit Bank Loan 3,000
D. Debit Office Equipment 5,000, Credit Cash 3,000

Correct Answer: A

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Question 23
A company has the following transactions: Sold office equipment for 4,000, purchased office equipment for 6,000, and paid 2,000 cash. Prepare the journal entries for these transactions.
Correct A. Debit Office Equipment 6,000, Credit Cash 2,000, Credit Bank Loan 4,000
B. Debit Office Equipment 6,000, Credit Cash 4,000
C. Debit Office Equipment 6,000, Credit Bank Loan 4,000
D. Debit Office Equipment 6,000, Credit Cash 6,000

Correct Answer: A

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Question 24
A company has the following transactions: Purchased office equipment for 8,000, paid 4,000 cash, and borrowed 4,000 from a bank. Prepare the journal entries for these transactions.
Correct A. Debit Office Equipment 8,000, Credit Cash 4,000, Credit Bank Loan 4,000
B. Debit Office Equipment 8,000, Credit Cash 8,000
C. Debit Office Equipment 8,000, Credit Bank Loan 4,000
D. Debit Office Equipment 8,000, Credit Cash 4,000

Correct Answer: A

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Question 25
A company has the following transactions: Sold office equipment for 6,000, purchased office equipment for 8,000, and paid 2,000 cash. Prepare the journal entries for these transactions.
Correct A. Debit Office Equipment 8,000, Credit Cash 2,000, Credit Bank Loan 6,000
B. Debit Office Equipment 8,000, Credit Cash 6,000
C. Debit Office Equipment 8,000, Credit Bank Loan 6,000
D. Debit Office Equipment 8,000, Credit Cash 8,000

Correct Answer: A

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