POST UTME PAN-ATLANTIC UNIVERSITY 2023 Accounting | Objective

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Question 1
A company maintains a cash book and a general ledger. The cash book shows a balance of ₦125,000, while the general ledger shows a balance of ₦120,000. The bank statement shows a balance of ₦130,000. What is the correct balance of the company's cash account?
A. ₦125,000
B. ₦120,000
C. ₦130,000
Correct D. ₦110,000

Correct Answer: D

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Question 2
A company uses a self-balancing ledger system. The ledger shows the following balances: Cash ₦100,000, Accounts Payable ₦50,000, and Common Stock ₦200,000. What is the total equity of the company?
Correct A. ₦250,000
B. ₦200,000
C. ₦150,000
D. ₦300,000

Correct Answer: A

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Question 3
A company prepares a trial balance and discovers the following errors: (1) a debit of ₦10,000 was posted to the wrong account, and (2) a credit of ₦5,000 was omitted. What is the correct total of the trial balance?
A. ₦250,000
Correct B. ₦255,000
C. ₦245,000
D. ₦240,000

Correct Answer: B

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Question 4
A company uses the single-entry system of accounting. The company's assets are ₦150,000, liabilities are ₦50,000, and equity is ₦100,000. What is the company's net income?
Correct A. ₦0
B. ₦10,000
C. ₦20,000
D. ₦30,000

Correct Answer: A

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Question 5
A company purchases a machine for ₦100,000 and depreciates it using the straight-line method over 5 years. What is the annual depreciation expense?
A. ₦20,000
Correct B. ₦15,000
C. ₦10,000
D. ₦5,000

Correct Answer: B

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Question 6
A company's trial balance shows a debit balance of ₦15,000 in the account 'Office Supplies' and a credit balance of ₦20,000 in the account 'Office Equipment'. What is the correct journal entry to record the correction of this error?
A. ₦15,000 debit to Office Supplies and ₦20,000 credit to Office Equipment
Correct B. ₦15,000 credit to Office Supplies and ₦20,000 debit to Office Equipment
C. ₦20,000 debit to Office Supplies and ₦15,000 credit to Office Equipment
D. ₦20,000 credit to Office Supplies and ₦15,000 debit to Office Equipment

Correct Answer: B

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Question 7
A company's cash book shows a balance of ₦50,000. However, the bank statement shows a balance of ₦60,000. What is the correct procedure to reconcile this difference?
Correct A. Prepare a bank reconciliation statement to identify the differences
B. Prepare a cash book reconciliation statement to identify the differences
C. Prepare a journal entry to adjust the cash book balance to match the bank statement balance
D. Prepare a journal entry to adjust the bank statement balance to match the cash book balance

Correct Answer: A

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Question 8
A company's trial balance shows a debit balance of ₦30,000 in the account 'Rent Expense' and a credit balance of ₦40,000 in the account 'Rent Received'. What is the correct journal entry to record the correction of this error?
A. ₦30,000 debit to Rent Expense and ₦40,000 credit to Rent Received
Correct B. ₦30,000 credit to Rent Expense and ₦40,000 debit to Rent Received
C. ₦40,000 debit to Rent Expense and ₦30,000 credit to Rent Received
D. ₦40,000 credit to Rent Expense and ₦30,000 debit to Rent Received

Correct Answer: B

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Question 9
A company's cash book shows a balance of ₦70,000. However, the bank statement shows a balance of ₦80,000. What is the correct procedure to reconcile this difference?
Correct A. Prepare a bank reconciliation statement to identify the differences
B. Prepare a cash book reconciliation statement to identify the differences
C. Prepare a journal entry to adjust the cash book balance to match the bank statement balance
D. Prepare a journal entry to adjust the bank statement balance to match the cash book balance

Correct Answer: A

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Question 10
A company's trial balance shows a debit balance of ₦20,000 in the account 'Salaries Expense' and a credit balance of ₦25,000 in the account 'Salaries Payable'. What is the correct journal entry to record the correction of this error?
A. ₦20,000 debit to Salaries Expense and ₦25,000 credit to Salaries Payable
Correct B. ₦20,000 credit to Salaries Expense and ₦25,000 debit to Salaries Payable
C. ₦25,000 debit to Salaries Expense and ₦20,000 credit to Salaries Payable
D. ₦25,000 credit to Salaries Expense and ₦20,000 debit to Salaries Payable

Correct Answer: B

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Question 11
A company uses the single-entry system of accounting. The company's accountant has recorded the following transactions in the journal: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 10,000 | | | 2 Jan | Equipment | | 8,000 | | 3 Jan | Rent | | 2,000 | What is the total amount of assets recorded in the journal?
Correct A. 12,000
B. 10,000
C. 8,000
D. 2,000

Correct Answer: A

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Question 12
A company has the following trial balance: | Account | Debit | Credit | | --- | --- | --- | | Cash | 10,000 | | | Equipment | | 8,000 | | Rent | | 2,000 | | Profit | | 5,000 | What is the total amount of assets recorded in the trial balance?
Correct A. 17,000
B. 15,000
C. 12,000
D. 10,000

Correct Answer: A

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Question 13
A company has the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 10,000 | | | 2 Jan | Equipment | | 8,000 | | 3 Jan | Rent | | 2,000 | What is the total amount of assets recorded in the journal?
Correct A. 12,000
B. 10,000
C. 8,000
D. 2,000

Correct Answer: A

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Question 14
A company has the following trial balance: | Account | Debit | Credit | | --- | --- | --- | | Cash | 10,000 | | | Equipment | | 8,000 | | Rent | | 2,000 | | Profit | | 5,000 | What is the total amount of assets recorded in the trial balance?
Correct A. 17,000
B. 15,000
C. 12,000
D. 10,000

Correct Answer: A

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Question 15
A company has the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 10,000 | | | 2 Jan | Equipment | | 8,000 | | 3 Jan | Rent | | 2,000 | What is the total amount of assets recorded in the journal?
Correct A. 12,000
B. 10,000
C. 8,000
D. 2,000

Correct Answer: A

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Question 16
A company has the following trial balance: | Account | Debit | Credit | | --- | --- | --- | | Cash | 10,000 | | | Equipment | | 8,000 | | Rent | | 2,000 | | Profit | | 5,000 | What is the total amount of assets recorded in the trial balance?
Correct A. 17,000
B. 15,000
C. 12,000
D. 10,000

Correct Answer: A

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Question 17
A company has the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 10,000 | | | 2 Jan | Equipment | | 8,000 | | 3 Jan | Rent | | 2,000 | What is the total amount of assets recorded in the journal?
Correct A. 12,000
B. 10,000
C. 8,000
D. 2,000

Correct Answer: A

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Question 18
A company has the following trial balance: | Account | Debit | Credit | | --- | --- | --- | | Cash | 10,000 | | | Equipment | | 8,000 | | Rent | | 2,000 | | Profit | | 5,000 | What is the total amount of assets recorded in the trial balance?
A. 17,000
B. 15,000
C. 12,000
D. 10,000

Correct Answer: VIEW ANSWER

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Question 19
Determine the amount of depreciation expense for the year ended December 31, 2022, using the straight-line method, given the following information: Cost of asset = ₦120,000; Residual value = ₦20,000; Useful life = 5 years.
A. ₦20,000
Correct B. ₦24,000
C. ₦28,000
D. ₦32,000

Correct Answer: B

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Question 20
A company has the following transactions related to its accounts receivable: Sale of goods on credit = ₦150,000; Collection of accounts receivable = ₦120,000; Write-off of bad debt = ₦10,000. Determine the net realizable value of accounts receivable.
A. ₦140,000
B. ₦130,000
Correct C. ₦120,000
D. ₦110,000

Correct Answer: C

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Question 21
A company uses the double-entry system of accounting. The following transactions occurred during the year: Purchased office supplies = ₦15,000; Sold office supplies = ₦8,000; Purchased office equipment = ₦30,000. Determine the net change in office supplies.
Correct A. ₦7,000
B. ₦12,000
C. ₦17,000
D. ₦22,000

Correct Answer: A

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Question 22
A company has the following transactions related to its cash: Cash received from customers = ₦200,000; Cash paid to suppliers = ₦150,000; Cash paid to employees = ₦30,000. Determine the net increase in cash.
A. ₦20,000
Correct B. ₦30,000
C. ₦40,000
D. ₦50,000

Correct Answer: B

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Question 23
A company uses the accrual basis of accounting. The following transactions occurred during the year: Sales revenue = ₦250,000; Cost of goods sold = ₦180,000; Operating expenses = ₦30,000. Determine the net income.
A. ₦40,000
B. ₦50,000
Correct C. ₦60,000
D. ₦70,000

Correct Answer: C

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Question 24
A company uses the straight-line method to depreciate its assets. If the asset's useful life is 5 years and the residual value is ₦0, what is the annual depreciation charge if the asset's cost is ₦1,500,000?
Correct A. ₦300,000
B. ₦250,000
C. ₦200,000
D. ₦150,000

Correct Answer: A

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Question 25
A government agency prepares a budget for the upcoming fiscal year. The budget includes a provision for depreciation of ₦500,000. If the agency's total assets are ₦10,000,000, what is the percentage of the budget allocated for depreciation?
A. 5%
Correct B. 10%
C. 15%
D. 20%

Correct Answer: B

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