POST UTME REDEEMERS UNIVERSITY 2020 Accounting | Objective

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Question 1 View Details
A company's trading account for the year ended 31st December 2020 showed a profit of ₦1,500,000. The balance on the profit and loss account was ₦500,000. The balance on the capital account was ₦2,000,000. The company's share capital was ₦3,000,000. What was the company's retained earnings at the end of the year?
Correct A. ₦1,000,000
B. ₦1,500,000
C. ₦2,000,000
D. ₦2,500,000

Correct Answer: A

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Question 2 View Details
A partnership has two partners, A and B. The capital accounts of A and B are ₦200,000 and ₦300,000 respectively. The profit and loss account shows a profit of ₦50,000. The drawings of A and B are ₦20,000 and ₦30,000 respectively. What is the balance on A's capital account at the end of the year?
Correct A. ₦180,000
B. ₦220,000
C. ₦240,000
D. ₦280,000

Correct Answer: A

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Question 3 View Details
A company's balance sheet as at 31st December 2020 showed the following balances: ₦1,500,000 in the trading account, ₦500,000 in the profit and loss account, and ₦2,000,000 in the capital account. The company's share capital was ₦3,000,000. What was the company's retained earnings at the end of the year?
Correct A. ₦1,000,000
B. ₦1,500,000
C. ₦2,000,000
D. ₦2,500,000

Correct Answer: A

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Question 4 View Details
A company's profit and loss account for the year ended 31st December 2020 showed a profit of ₦1,500,000. The balance on the trading account was ₦500,000. The balance on the capital account was ₦2,000,000. The company's share capital was ₦3,000,000. What was the company's retained earnings at the end of the year?
Correct A. ₦1,000,000
B. ₦1,500,000
C. ₦2,000,000
D. ₦2,500,000

Correct Answer: A

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Question 5 View Details
A company's balance sheet as at 31st December 2020 showed the following balances: ₦1,500,000 in the trading account, ₦500,000 in the profit and loss account, and ₦2,000,000 in the capital account. The company's share capital was ₦3,000,000. What was the company's retained earnings at the end of the year?
Correct A. ₦1,000,000
B. ₦1,500,000
C. ₦2,000,000
D. ₦2,500,000

Correct Answer: A

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Question 6 View Details
In a partnership account, what is the correct method of valuing the goodwill of a partnership?
Correct A. Average of the three-year profits
B. Average of the five-year profits
C. Average of the seven-year profits
D. Average of the nine-year profits

Correct Answer: A

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Question 7 View Details
A company uses the weighted average method of inventory valuation. If the cost of goods available for sale is ₦1,500,000, and the ending inventory is ₦1,200,000, what is the cost of goods sold?
A. ₦300,000
Correct B. ₦400,000
C. ₦500,000
D. ₦600,000

Correct Answer: B

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Question 8 View Details
A manufacturing company produces two products, A and B. Product A requires 2 hours of direct labor and Product B requires 3 hours of direct labor. If the company works 40 hours in a week, how many units of Product A can be produced?
A. 20 units
Correct B. 25 units
C. 30 units
D. 35 units

Correct Answer: B

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Question 9 View Details
A company uses the straight-line method of depreciation. If the cost of the asset is ₦500,000 and the useful life is 5 years, what is the annual depreciation?
A. ₦100,000
Correct B. ₦125,000
C. ₦150,000
D. ₦175,000

Correct Answer: B

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Question 10 View Details
A company's financial statements show a net income of ₦1,000,000. If the company's tax rate is 25%, what is the amount of income tax paid?
A. ₦250,000
Correct B. ₦300,000
C. ₦350,000
D. ₦400,000

Correct Answer: B

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Question 11 View Details
A company produces two products, X and Y, using two machines, A and B. The production process for X requires 2 hours on machine A and 3 hours on machine B, while the production process for Y requires 3 hours on machine A and 2 hours on machine B. If machine A operates for 24 hours and machine B operates for 18 hours, how many units of product X and Y can be produced?
A. 10 units of X and 6 units of Y
B. 8 units of X and 8 units of Y
Correct C. 12 units of X and 4 units of Y
D. 6 units of X and 10 units of Y

Correct Answer: C

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Question 12 View Details
A partnership is formed between two individuals, A and B, with initial capital contributions of ₦50,000 and ₦30,000 respectively. After one year, the partnership earns a profit of ₦120,000. If A's share of the profit is ₦60,000, what is B's share of the profit?
A. ₦30,000
Correct B. ₦40,000
C. ₦50,000
D. ₦60,000

Correct Answer: B

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Question 13 View Details
A company's trial balance shows the following balances: Accounts Payable ₦100,000, Sales Revenue ₦500,000, Cost of Goods Sold ₦300,000, and Common Stock ₦200,000. What is the company's net income?
A. ₦200,000
Correct B. ₦300,000
C. ₦400,000
D. ₦500,000

Correct Answer: B

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Question 14 View Details
A company's balance sheet shows the following balances: Cash ₦150,000, Accounts Payable ₦100,000, Common Stock ₦200,000, and Retained Earnings ₦50,000. What is the company's total liabilities?
A. ₦250,000
B. ₦300,000
Correct C. ₦350,000
D. ₦400,000

Correct Answer: C

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Question 15 View Details
A company's income statement shows the following balances: Sales Revenue ₦500,000, Cost of Goods Sold ₦300,000, and Gross Profit ₦200,000. What is the company's operating expenses?
A. ₦100,000
B. ₦150,000
C. ₦200,000
Correct D. ₦250,000

Correct Answer: D

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Question 16 View Details
A public sector organization has a cash book balance of ₦1,500,000 and a bank statement balance of ₦1,800,000. The bank statement includes a credit of ₦200,000 for an unearned revenue. What is the correct journal entry to reconcile the cash book and bank statement?
Correct A. ₦1,500,000 debit to cash, ₦1,800,000 credit to bank
B. ₦200,000 debit to cash, ₦200,000 credit to bank
C. ₦1,800,000 debit to bank, ₦1,500,000 credit to cash
D. ₦1,500,000 debit to bank, ₦1,800,000 credit to cash

Correct Answer: A

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Question 17 View Details
A company uses the straight-line method of depreciation. If the asset's useful life is 5 years and the residual value is ₦50,000, what is the annual depreciation charge for an asset costing ₦500,000?
A. ₦90,000
B. ₦95,000
Correct C. ₦100,000
D. ₦105,000

Correct Answer: C

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Question 18 View Details
A company has the following transactions: Purchased office equipment for ₦120,000; sold office equipment for ₦80,000; purchased office equipment for ₦150,000. What is the net increase in office equipment?
A. ₦30,000
B. ₦50,000
Correct C. ₦70,000
D. ₦90,000

Correct Answer: C

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Question 19 View Details
A company has the following transactions: Purchased office equipment for ₦120,000; sold office equipment for ₦80,000; purchased office equipment for ₦150,000. What is the net increase in office equipment?
A. ₦30,000
B. ₦50,000
Correct C. ₦70,000
D. ₦90,000

Correct Answer: C

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Question 20 View Details
A company has the following transactions: Purchased office equipment for ₦120,000; sold office equipment for ₦80,000; purchased office equipment for ₦150,000. What is the net increase in office equipment?
A. ₦30,000
B. ₦50,000
Correct C. ₦70,000
D. ₦90,000

Correct Answer: C

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Question 21 View Details
In a partnership account, what is the correct method for calculating the capital of a partner who has been absent for a year?
A. Capital at the beginning of the year
B. Capital at the end of the year
Correct C. Average capital for the year
D. Capital at the beginning of the year plus any drawings made during the year

Correct Answer: C

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Question 22 View Details
A company uses the cash book method of accounting. The cash book shows a balance of ₦15,000. The bank statement shows a balance of ₦18,000. What is the correct procedure to reconcile the two balances?
Correct A. Prepare a bank reconciliation statement
B. Adjust the cash book balance to match the bank statement balance
C. Prepare a cash book reconciliation statement
D. Adjust the bank statement balance to match the cash book balance

Correct Answer: A

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Question 23 View Details
What is the correct accounting treatment for depreciation of a building that has a useful life of 20 years?
Correct A. Amortize the cost of the building over its useful life
B. Charge the full cost of the building to expense in the year of purchase
C. Charge the full cost of the building to expense in the year of disposal
D. Charge the full cost of the building to expense in the year of sale

Correct Answer: A

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Question 24 View Details
A company has a trial balance that shows a balance of ₦10,000 for the account 'Rent Received'. However, the company's accounting records show that the rent was actually received in cash. What is the correct treatment for this account?
Correct A. Debit the 'Rent Received' account and credit the 'Cash' account
B. Credit the 'Rent Received' account and debit the 'Cash' account
C. Debit the 'Rent Received' account and credit the 'Accounts Receivable' account
D. Credit the 'Rent Received' account and debit the 'Accounts Payable' account

Correct Answer: A

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Question 25 View Details
A company has a bank statement that shows a balance of ₦20,000. However, the company's cash book shows a balance of ₦18,000. What is the correct procedure to reconcile the two balances?
Correct A. Prepare a bank reconciliation statement
B. Adjust the cash book balance to match the bank statement balance
C. Prepare a cash book reconciliation statement
D. Adjust the bank statement balance to match the cash book balance

Correct Answer: A

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