Practice Post UTME WELLSPRING UNIVERSITY accounting 2017 Past Questions

Question 1

A company uses the double-entry system to record its transactions. If the company purchases office supplies for ₦10,000 cash, what is the effect on the accounting equation?

A. Assets increase, Liabilities increase

Correct B. Assets increase, Liabilities decrease

C. Assets decrease, Liabilities increase

D. Assets decrease, Liabilities decrease

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2

A government agency is required to prepare a budget for the upcoming fiscal year. Which of the following is a characteristic of a zero-based budget?

Correct A. All expenses are assumed to be zero unless justified

B. All expenses are assumed to be justified unless challenged

C. All expenses are assumed to be justified unless challenged and approved

D. All expenses are assumed to be zero unless approved

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3

A company prepares a trial balance as part of its accounting process. Which of the following is a characteristic of a trial balance?

A. It is a list of all accounts with their respective debit and credit balances

Correct B. It is a list of all accounts with their respective debit and credit balances, and is used to identify any errors in the accounting process

C. It is a list of all accounts with their respective debit and credit balances, and is used to prepare the financial statements

D. It is a list of all accounts with their respective debit and credit balances, and is used to prepare the budget

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4

A partnership is formed between two individuals, John and Mary. The partnership agreement states that John will contribute ₦50,000 and Mary will contribute ₦30,000. What is the ratio of John's capital to Mary's capital?

A. 1:1

Correct B. 1:2

C. 2:1

D. 3:2

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5

A company prepares a balance sheet as part of its accounting process. Which of the following is a characteristic of a balance sheet?

Correct A. It is a list of all assets, liabilities, and equity of the company

B. It is a list of all assets and liabilities of the company, and is used to prepare the income statement

C. It is a list of all assets and equity of the company, and is used to prepare the cash flow statement

D. It is a list of all liabilities and equity of the company, and is used to prepare the budget

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6

In a partnership account, the capital of a partner who leaves the firm is transferred to the remaining partners in the ratio of their existing capitals. If the capital of the leaving partner is ₦1,500 and the existing capitals of the remaining partners are ₦1,200 and ₦2,000 respectively, what is the amount of capital that the partner with ₦2,000 will receive?

Correct A. ₦1,000

B. ₦1,200

C. ₦1,500

D. ₦2,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7

A company produces two products, X and Y. The production process involves two departments, A and B. Department A produces 60% of product X and 40% of product Y, while department B produces 40% of product X and 60% of product Y. If department A uses 10,000 units of raw material and department B uses 8,000 units of raw material, what is the total raw material used by the company?

A. 18,000

B. 20,000

Correct C. 22,000

D. 24,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8

A company's trading account for the year ended 31st December 20X7 shows a profit of ₦1,50,000. The company's balance sheet as at 31st December 20X7 shows a current liability of ₦1,20,000 and a non-current liability of ₦2,50,000. What is the company's net worth as at 31st December 20X7?

A. ₦1,80,000

Correct B. ₦2,30,000

C. ₦3,00,000

D. ₦3,50,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9

A company's cash book shows the following transactions for the month of January 20X8: Debit 1. Cash ₦1,000 2. Bank ₦2,000 3. Sales ₦3,000 4. Purchases ₦4,000 Credit 1. Cash ₦5,000 2. Bank ₦6,000 3. Sales ₦7,000 4. Purchases ₦8,000 What is the company's cash balance as at 31st January 20X8?

A. ₦1,000

B. ₦2,000

Correct C. ₦3,000

D. ₦4,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10

A company issues 10,000 shares of ₡0 each at a premium of ₡1 per share. If the company receives ₡,00,000 from the issue of shares, what is the amount of premium received?

A. ₡0,000

Correct B. ₡1,000

C. ₡2,000

D. ₡3,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11

A company issued 10,000 shares of ₦10 each at a premium of ₦5 per share. The shares were subscribed for by the public for ₦15 per share. Calculate the amount received from the public and the amount paid up by the shareholders.

A. ₦150,000

Correct B. ₦160,000

C. ₦170,000

D. ₦180,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12

A company's trial balance showed an error of ₦5,000 in the debit side of the purchases account. The correct amount of purchases was ₦100,000. What was the correct amount of purchases?

Correct A. ₦105,000

B. ₦100,000

C. ₦95,000

D. ₦90,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13

A company's balance sheet showed a capital of ₦50,000 and a profit of ₦20,000. What was the total amount of the company's assets?

A. ₦70,000

B. ₦80,000

Correct C. ₦90,000

D. ₦70,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14

A company issued 5,000 debentures of ₦100 each at a premium of ₦10 per debenture. The debentures were issued at a discount of ₦5 per debenture. Calculate the amount received from the public and the amount paid up by the debenture holders.

A. ₦475,000

B. ₦485,000

Correct C. ₦495,000

D. ₦505,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15

A company's trial balance showed an error of ₦10,000 in the credit side of the sales account. The correct amount of sales was ₦150,000. What was the correct amount of sales?

Correct A. ₦160,000

B. ₦150,000

C. ₦140,000

D. ₦130,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16

In a partnership account, the capital of a partner who leaves the business is transferred to the remaining partners in the ratio of their existing capitals. If the capital of the leaving partner is ₦ 50,000 and the existing capitals of the remaining partners are ₦ 30,000 and ₦ 40,000 respectively, what is the amount of capital to be transferred to the partner with ₦ 40,000 capital?

A. ₦ 10,000

Correct B. ₦ 20,000

C. ₦ 30,000

D. ₦ 40,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17

A company maintains a cash book and a general ledger. The cash book shows a balance of ₦ 10,000, while the general ledger shows a balance of ₦ 15,000. The bank statement shows a balance of ₦ 12,000. What is the correct balance of the company's cash account?

A. ₦ 10,000

Correct B. ₦ 12,000

C. ₦ 15,000

D. ₦ 20,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18

A company prepares a trial balance but discovers that the debit and credit totals are not equal. The difference is ₦ 1,000. What is the next step in the accounting process?

A. Prepare a balance sheet

B. Prepare a cash flow statement

Correct C. Investigate the cause of the difference

D. Prepare a profit and loss account

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19

A company uses a self-balancing ledger to record its transactions. The ledger shows a balance of ₦ 20,000. What is the purpose of the self-balancing ledger?

A. To record transactions in a chronological order

B. To record transactions in a classified order

Correct C. To ensure that the ledger is self-balancing

D. To prepare a trial balance

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20

A company maintains a control account for its cash account. The control account shows a balance of ₦ 15,000. What is the purpose of the control account?

A. To record transactions in a chronological order

B. To record transactions in a classified order

Correct C. To ensure that the cash account is properly controlled

D. To prepare a trial balance

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21

In the public sector, what is the primary purpose of the accounting system?

Correct A. To provide financial information for decision-making

B. To ensure compliance with regulatory requirements

C. To facilitate the preparation of financial statements

D. To manage the organization's resources effectively

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22

A company uses the cash book to record its transactions. What is the primary advantage of using the cash book?

Correct A. It provides a complete record of all transactions

B. It facilitates the preparation of financial statements

C. It helps to identify and correct errors

D. It reduces the need for bank reconciliations

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23

A business has the following transactions: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 1000 | | | 2 Jan | Sales | | 500 | | 3 Jan | Purchase | 200 | | What is the correct journal entry for the purchase on 3 Jan?

A. Debit Purchase Account 200, Credit Cash Account 200

Correct B. Debit Cash Account 200, Credit Purchase Account 200

C. Debit Purchase Account 200, Credit Sales Account 200

D. Debit Sales Account 200, Credit Purchase Account 200

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24

A company has the following trial balance: | Account | Debit | Credit | | --- | --- | --- | | Cash | 1000 | | | Sales | | 500 | | Purchase | 200 | | | Capital | | 2000 | What is the correct balance of the Capital account?

Correct A. ₦2000

B. ₦2500

C. ₦3000

D. ₦3500

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25

A business has the following single entry transactions: | Date | Description | Amount | | --- | --- | --- | | 1 Jan | Cash | 1000 | | 2 Jan | Sales | 500 | | 3 Jan | Purchase | 200 | What is the correct journal entry for the purchase on 3 Jan?

A. Debit Purchase Account 200, Credit Cash Account 200

Correct B. Debit Cash Account 200, Credit Purchase Account 200

C. Debit Purchase Account 200, Credit Sales Account 200

D. Debit Sales Account 200, Credit Purchase Account 200

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

POST UTME WELLSPRING UNIVERSITY 2017 Accounting | Objective

Master the Exam!

Help others prepare! Share this practice hub: