POST UTME PAN-ATLANTIC UNIVERSITY 2021 Accounting | Objective

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Question 1
A company uses a job costing system to account for its manufacturing costs. The following information is available for the month of January: Job 101: Materials 1,500, Labour 2,000, Overheads 1,200. Job 102: Materials 2,000, Labour 1,500, Overheads 1,500. The company's overhead rate is 30% of direct labour cost. Calculate the total manufacturing cost for the month of January.
A. 6,000
Correct B. 7,000
C. 8,000
D. 9,000

Correct Answer: B

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Question 2
A company's trial balance as at 31 December 2020 is as follows: Accounts Payable 10,000, Accounts Receivable 5,000, Common Stock 20,000, Dividends 2,000, Equipment 15,000, Interest Expense 1,000, Interest Income 500, Net Income 8,000, Retained Earnings 12,000, Salaries Expense 10,000, Sales Revenue 50,000, Taxes Payable 3,000. Prepare a balance sheet as at 31 December 2020.
Correct A. Assets 75,000, Liabilities 23,000, Equity 52,000
B. Assets 80,000, Liabilities 28,000, Equity 52,000
C. Assets 85,000, Liabilities 33,000, Equity 52,000
D. Assets 90,000, Liabilities 38,000, Equity 52,000

Correct Answer: A

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Question 3
A company uses the perpetual inventory system. On 1 January 2020, the company had 100 units of Product A in inventory at a cost of 10 per unit. During the year, the company purchased 500 units of Product A at 12 per unit and sold 200 units at 20 per unit. Prepare the journal entry to record the purchase and sale of Product A.
Correct A. Debit Purchase of Inventory 6,000, Credit Cash 6,000
B. Debit Purchase of Inventory 6,000, Credit Accounts Payable 6,000
C. Debit Sales Revenue 4,000, Credit Cost of Goods Sold 4,000
D. Debit Purchase of Inventory 6,000, Credit Accounts Receivable 6,000

Correct Answer: A

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Question 4
A company's financial statements for the year ended 31 December 2020 are as follows: Balance Sheet: Assets 100,000, Liabilities 50,000, Equity 50,000. Income Statement: Sales Revenue 200,000, Cost of Goods Sold 100,000, Gross Profit 100,000, Operating Expenses 50,000, Net Income 50,000. Prepare a statement of cash flows for the year ended 31 December 2020.
Correct A. Operating Activities 50,000, Investing Activities 0, Financing Activities 0
B. Operating Activities 0, Investing Activities 50,000, Financing Activities 0
C. Operating Activities 0, Investing Activities 0, Financing Activities 50,000
D. Operating Activities 50,000, Investing Activities 50,000, Financing Activities 50,000

Correct Answer: A

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Question 5
A company uses the single-entry system of accounting. The following information is available for the year ended 31 December 2020: Sales Revenue 200,000, Cost of Goods Sold 100,000, Operating Expenses 50,000, Net Income 50,000. Prepare a balance sheet as at 31 December 2020.
Correct A. Assets 150,000, Liabilities 50,000, Equity 100,000
B. Assets 160,000, Liabilities 60,000, Equity 100,000
C. Assets 170,000, Liabilities 70,000, Equity 100,000
D. Assets 180,000, Liabilities 80,000, Equity 100,000

Correct Answer: A

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Question 6
A public sector organization has a cash book that records all its financial transactions. The cash book shows a balance of ₦1,500,000. However, the bank statement shows a balance of ₦1,800,000. What is the reason for the difference?
Correct A. The cash book has not been updated to reflect the latest transactions.
B. The bank statement has not been updated to reflect the latest transactions.
C. The cash book and bank statement have different accounting periods.
D. The cash book and bank statement have different exchange rates.

Correct Answer: A

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Question 7
A company uses the straight-line method of depreciation for its assets. If the asset has a useful life of 5 years and a cost of ₦500,000, what is the annual depreciation charge?
A. ₦100,000
Correct B. ₦80,000
C. ₦50,000
D. ₦20,000

Correct Answer: B

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Question 8
A manufacturing company produces two products, A and B. Product A has a selling price of ₦200 and a variable cost of ₦150. Product B has a selling price of ₦300 and a variable cost of ₦250. If the company produces 100 units of Product A and 50 units of Product B, what is the total contribution margin?
A. ₦20,000
B. ₦25,000
Correct C. ₦30,000
D. ₦35,000

Correct Answer: C

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Question 9
A company has the following incomplete records for the year ended December 31, 2022: | Date | Debit | Credit | | --- | --- | --- | | Jan 1 | ₦10,000 | ₦0 | | Jan 15 | ₦5,000 | ₦0 | | Feb 1 | ₦8,000 | ₦0 | | Mar 1 | ₦12,000 | ₦0 | | Apr 1 | ₦6,000 | ₦0 | | May 1 | ₦9,000 | ₦0 | | Jun 1 | ₦11,000 | ₦0 | | Jul 1 | ₦7,000 | ₦0 | | Aug 1 | ₦4,000 | ₦0 | | Sep 1 | ₦3,000 | ₦0 | | Oct 1 | ₦2,000 | ₦0 | | Nov 1 | ₦1,000 | ₦0 | | Dec 1 | ₦0 | ₦20,000 | What is the total amount of cash received during the year?
A. ₦60,000
B. ₦70,000
Correct C. ₦80,000
D. ₦90,000

Correct Answer: C

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Question 10
A company has the following single-entry records for the year ended December 31, 2022: | Date | Debit | Credit | | --- | --- | --- | | Jan 1 | ₦10,000 | ₦0 | | Jan 15 | ₦5,000 | ₦0 | | Feb 1 | ₦8,000 | ₦0 | | Mar 1 | ₦12,000 | ₦0 | | Apr 1 | ₦6,000 | ₦0 | | May 1 | ₦9,000 | ₦0 | | Jun 1 | ₦11,000 | ₦0 | | Jul 1 | ₦7,000 | ₦0 | | Aug 1 | ₦4,000 | ₦0 | | Sep 1 | ₦3,000 | ₦0 | | Oct 1 | ₦2,000 | ₦0 | | Nov 1 | ₦1,000 | ₦0 | | Dec 1 | ₦0 | ₦20,000 | What is the total amount of cash paid during the year?
A. ₦60,000
B. ₦70,000
Correct C. ₦80,000
D. ₦90,000

Correct Answer: C

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Question 11
A company uses the perpetual inventory system. At the end of the year, the following information is available: Beginning inventory, 2,000 units at ₦10 each; purchases, 12,000 units at ₦12 each; sales, 8,000 units at ₦20 each. Calculate the cost of goods sold.
Correct A. ₦96,000
B. ₦120,000
C. ₦144,000
D. ₦168,000

Correct Answer: A

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Question 12
A company's trial balance as at December 31, 2022, is as follows: Accounts Payable ₦150,000; Accounts Receivable ₦200,000; Common Stock ₦500,000; Cost of Goods Sold ₦300,000; Dividends ₦20,000; Equipment ₦100,000; Interest Expense ₦15,000; Interest Income ₦10,000; Net Income ₦50,000; Rent Expense ₦30,000; Salaries Expense ₦40,000; Sales ₦600,000; Selling Expenses ₦20,000; Utilities Expense ₦10,000. Prepare a balance sheet as at December 31, 2022.
A. ₦1,200,000
B. ₦1,300,000
C. ₦1,400,000
Correct D. ₦1,500,000

Correct Answer: D

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Question 13
A company's trial balance as at December 31, 2022, is as follows: Accounts Payable ₦150,000; Accounts Receivable ₦200,000; Common Stock ₦500,000; Cost of Goods Sold ₦300,000; Dividends ₦20,000; Equipment ₦100,000; Interest Expense ₦15,000; Interest Income ₦10,000; Net Income ₦50,000; Rent Expense ₦30,000; Salaries Expense ₦40,000; Sales ₦600,000; Selling Expenses ₦20,000; Utilities Expense ₦10,000. Prepare a statement of retained earnings as at December 31, 2022.
A. ₦550,000
B. ₦560,000
C. ₦570,000
Correct D. ₦580,000

Correct Answer: D

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Question 14
A company uses the perpetual inventory system. At the end of the year, the following information is available: Beginning inventory, 2,000 units at ₦10 each; purchases, 12,000 units at ₦12 each; sales, 8,000 units at ₦20 each. Prepare a statement of cost of goods sold as at December 31, 2022.
Correct A. ₦96,000
B. ₦120,000
C. ₦144,000
D. ₦168,000

Correct Answer: A

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Question 15
A company's trial balance as at December 31, 2022, is as follows: Accounts Payable ₦150,000; Accounts Receivable ₦200,000; Common Stock ₦500,000; Cost of Goods Sold ₦300,000; Dividends ₦20,000; Equipment ₦100,000; Interest Expense ₦15,000; Interest Income ₦10,000; Net Income ₦50,000; Rent Expense ₦30,000; Salaries Expense ₦40,000; Sales ₦600,000; Selling Expenses ₦20,000; Utilities Expense ₦10,000. Prepare a statement of cash flows as at December 31, 2022.
A. ₦600,000
B. ₦700,000
C. ₦800,000
Correct D. ₦900,000

Correct Answer: D

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Question 16
A company uses the perpetual inventory system. At the end of the year, the following information is available: Beginning inventory, 2,000 units at ₦10 each; purchases, 12,000 units at ₦12 each; sales, 8,000 units at ₦20 each. Prepare a statement of retained earnings as at December 31, 2022.
A. ₦550,000
B. ₦560,000
C. ₦570,000
Correct D. ₦580,000

Correct Answer: D

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Question 17
A company's trial balance as at December 31, 2022, is as follows: Accounts Payable ₦150,000; Accounts Receivable ₦200,000; Common Stock ₦500,000; Cost of Goods Sold ₦300,000; Dividends ₦20,000; Equipment ₦100,000; Interest Expense ₦15,000; Interest Income ₦10,000; Net Income ₦50,000; Rent Expense ₦30,000; Salaries Expense ₦40,000; Sales ₦600,000; Selling Expenses ₦20,000; Utilities Expense ₦10,000. Prepare a statement of stockholders' equity as at December 31, 2022.
A. ₦1,200,000
B. ₦1,300,000
C. ₦1,400,000
Correct D. ₦1,500,000

Correct Answer: D

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Question 18
A company's trading account for the year ended 31st December 2021 shows a profit of ₦1,500,000. The balance on the profit and loss account is ₦2,000,000. The balance on the capital account is ₦3,500,000. The company's issued share capital is ₦5,000,000. Calculate the company's retained earnings at the end of the year.
Correct A. ₦6,000,000
B. ₦5,500,000
C. ₦6,500,000
D. ₦7,000,000

Correct Answer: A

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Question 19
A company's balance sheet as at 31st December 2021 shows the following balances: ₦1,000,000 in cash, ₦2,000,000 in accounts receivable, ₦3,000,000 in inventory, ₦4,000,000 in property, plant, and equipment, and ₦5,000,000 in long-term debt. Calculate the company's working capital.
Correct A. ₦6,000,000
B. ₦7,000,000
C. ₦8,000,000
D. ₦9,000,000

Correct Answer: A

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Question 20
A company's control account for the year ended 31st December 2021 shows the following transactions: purchases of ₦1,000,000, sales of ₦2,000,000, and returns of ₦300,000. Calculate the company's cost of goods sold.
Correct A. ₦1,700,000
B. ₦1,800,000
C. ₦1,900,000
D. ₦2,000,000

Correct Answer: A

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Question 21
A company's self-balancing ledger for the year ended 31st December 2021 shows the following balances: ₦1,000,000 in cash, ₦2,000,000 in accounts receivable, ₦3,000,000 in inventory, ₦4,000,000 in property, plant, and equipment, and ₦5,000,000 in long-term debt. Calculate the company's net working capital.
Correct A. ₦6,000,000
B. ₦7,000,000
C. ₦8,000,000
D. ₦9,000,000

Correct Answer: A

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Question 22
A company's company account for the year ended 31st December 2021 shows the following transactions: issue of ₦1,000,000 in shares, purchase of ₦2,000,000 in debentures, and redemption of ₦3,000,000 in debentures. Calculate the company's total equity.
Correct A. ₦6,000,000
B. ₦7,000,000
C. ₦8,000,000
D. ₦9,000,000

Correct Answer: A

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Question 23
Determine the amount of depreciation for a machine that cost ₦250,000 and has a useful life of 5 years, with a residual value of ₦50,000. The machine is depreciated using the straight-line method.
A. ₦40,000
Correct B. ₦50,000
C. ₦60,000
D. ₦70,000

Correct Answer: B

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Question 24
A company produces 500 units of a product in a month. The total cost of production is ₦250,000, which includes direct materials of ₦120,000 and direct labor of ₦80,000. The company uses the weighted average method to assign overheads. The overheads for the month are ₦30,000. Calculate the cost of goods sold.
A. ₦230,000
B. ₦240,000
Correct C. ₦250,000
D. ₦260,000

Correct Answer: C

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Question 25
A company's trial balance as at 31st December 2022 is as follows: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦50,000 | ₦0 | | Accounts Payable | ₦0 | ₦50,000 | | Sales Revenue | ₦0 | ₦200,000 | | Cost of Goods Sold | ₦100,000 | ₦0 | | Net Income | ₦0 | ₦0 | | Total | ₦150,000 | ₦250,000 | Identify the error in the trial balance.
Correct A. The debit and credit totals do not match.
B. The cash account has a debit balance.
C. The accounts payable account has a credit balance.
D. The sales revenue account has a debit balance.

Correct Answer: A

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