Practice post utme abu accounting 2020 Past Questions

Question 1

In a public sector accounting system, what is the primary purpose of the 'Ledger Account'?

A. To record all financial transactions of the organization

B. To prepare the final accounts of the organization

Correct C. To provide a permanent record of all financial transactions

D. To prepare the budget of the organization

Correct Answer: C

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Question 2

A company uses the double-entry system of accounting. If the company purchases an asset for ₦100,000, what is the effect on the accounting equation?

A. Assets increase by ₦100,000 and Liabilities decrease by ₦100,000

Correct B. Assets increase by ₦100,000 and Equity increase by ₦100,000

C. Assets decrease by ₦100,000 and Liabilities increase by ₦100,000

D. Assets decrease by ₦100,000 and Equity decrease by ₦100,000

Correct Answer: B

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Question 3

A company has a cash book and a bank reconciliation statement. If the cash book balance is ₦50,000 and the bank statement balance is ₦60,000, what is the reason for the difference?

Correct A. The company has deposited cash into the bank but has not been credited yet

B. The company has withdrawn cash from the bank but has not been debited yet

C. The bank has charged the company a fee for a service

D. The company has made a mistake in recording a transaction

Correct Answer: A

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Question 4

A company uses the straight-line method of depreciation. If the asset has a useful life of 5 years and a cost of ₦100,000, what is the annual depreciation charge?

A. ₦20,000

Correct B. ₦25,000

C. ₦30,000

D. ₦40,000

Correct Answer: B

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Question 5

A company has a fixed asset with a cost of ₦500,000 and a residual value of ₦50,000. If the asset is depreciated using the reducing balance method, what is the depreciation charge for the first year?

A. ₦200,000

Correct B. ₦250,000

C. ₦300,000

D. ₦350,000

Correct Answer: B

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Question 6

A company uses the single entry system of accounting. The following transactions were recorded in the journal: 1. Purchased office equipment for ₦ 120,000. 2. Sold goods for ₦ 150,000. 3. Purchased raw materials for ₦ 80,000. 4. Paid salaries of ₦ 30,000. 5. Collected cash from customers for ₦ 200,000. 6. Paid rent for ₦ 20,000. 7. Purchased factory equipment for ₦ 180,000. 8. Sold factory equipment for ₦ 120,000. 9. Purchased office supplies for ₦ 10,000. 10. Collected cash from customers for ₦ 50,000. The journal entries were posted to the ledger. The ledger accounts are as follows: Office Equipment: ₦ 120,000. Raw Materials: ₦ 80,000. Salaries: ₦ 30,000. Cash: ₦ 350,000. Rent: ₦ 20,000. Factory Equipment: ₦ 180,000. Office Supplies: ₦ 10,000. What is the total amount of cash received from customers?

A. ₦ 300,000

Correct B. ₦ 350,000

C. ₦ 400,000

D. ₦ 450,000

Correct Answer: B

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Question 7

A company has the following transactions: 1. Purchased raw materials for ₦ 100,000. 2. Sold goods for ₦ 150,000. 3. Purchased factory equipment for ₦ 180,000. 4. Paid salaries of ₦ 30,000. 5. Collected cash from customers for ₦ 200,000. 6. Paid rent for ₦ 20,000. 7. Purchased office supplies for ₦ 10,000. 8. Sold factory equipment for ₦ 120,000. 9. Purchased office equipment for ₦ 120,000. 10. Collected cash from customers for ₦ 50,000. The journal entries were posted to the ledger. The ledger accounts are as follows: Raw Materials: ₦ 100,000. Factory Equipment: ₦ 180,000. Salaries: ₦ 30,000. Cash: ₦ 450,000. Rent: ₦ 20,000. Office Supplies: ₦ 10,000. Office Equipment: ₦ 120,000. What is the total amount of cash received from customers?

A. ₦ 250,000

B. ₦ 300,000

Correct C. ₦ 350,000

D. ₦ 400,000

Correct Answer: C

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Question 8

A company has the following transactions: 1. Purchased raw materials for ₦ 100,000. 2. Sold goods for ₦ 150,000. 3. Purchased factory equipment for ₦ 180,000. 4. Paid salaries of ₦ 30,000. 5. Collected cash from customers for ₦ 200,000. 6. Paid rent for ₦ 20,000. 7. Purchased office supplies for ₦ 10,000. 8. Sold factory equipment for ₦ 120,000. 9. Purchased office equipment for ₦ 120,000. 10. Collected cash from customers for ₦ 50,000. The journal entries were posted to the ledger. The ledger accounts are as follows: Raw Materials: ₦ 100,000. Factory Equipment: ₦ 180,000. Salaries: ₦ 30,000. Cash: ₦ 450,000. Rent: ₦ 20,000. Office Supplies: ₦ 10,000. Office Equipment: ₦ 120,000. What is the total amount of cash received from customers?

A. ₦ 250,000

B. ₦ 300,000

Correct C. ₦ 350,000

D. ₦ 400,000

Correct Answer: C

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Question 9

A company has the following transactions: 1. Purchased raw materials for ₦ 100,000. 2. Sold goods for ₦ 150,000. 3. Purchased factory equipment for ₦ 180,000. 4. Paid salaries of ₦ 30,000. 5. Collected cash from customers for ₦ 200,000. 6. Paid rent for ₦ 20,000. 7. Purchased office supplies for ₦ 10,000. 8. Sold factory equipment for ₦ 120,000. 9. Purchased office equipment for ₦ 120,000. 10. Collected cash from customers for ₦ 50,000. The journal entries were posted to the ledger. The ledger accounts are as follows: Raw Materials: ₦ 100,000. Factory Equipment: ₦ 180,000. Salaries: ₦ 30,000. Cash: ₦ 450,000. Rent: ₦ 20,000. Office Supplies: ₦ 10,000. Office Equipment: ₦ 120,000. What is the total amount of cash received from customers?

A. ₦ 250,000

B. ₦ 300,000

Correct C. ₦ 350,000

D. ₦ 400,000

Correct Answer: C

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Question 10

A company produces two products, X and Y, using two machines, M1 and M2. The production process for X requires 2 hours on M1 and 3 hours on M2, while the production process for Y requires 3 hours on M1 and 2 hours on M2. If the company operates for 24 hours, how many units of X and Y should it produce to maximize profit, given that the profit per unit of X is ₦150 and the profit per unit of Y is ₦200?

A. 5 units of X and 5 units of Y

Correct B. 10 units of X and 2 units of Y

C. 15 units of X and 1 unit of Y

D. 20 units of X and 0 units of Y

Correct Answer: B

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Question 11

A company has two departments, A and B. Department A has a budget of ₦1,000,000 and department B has a budget of ₦500,000. If the company allocates 60% of its budget to department A and 40% to department B, what is the total budget allocated to both departments?

Correct A. ₦1,200,000

B. ₦1,500,000

C. ₦1,800,000

D. ₦2,000,000

Correct Answer: A

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Question 12

A company uses the weighted average method to value its inventory. If the company has three items in its inventory, with costs of ₦100, ₦200, and ₦300, and the weights are 20%, 40%, and 40%, respectively, what is the weighted average cost per unit?

A. ₦150

B. ₦200

Correct C. ₦250

D. ₦300

Correct Answer: C

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Question 13

A company has two partners, A and B, who share profits in the ratio 3:2. If the company makes a profit of ₦1,000,000, how much will each partner receive?

Correct A. ₦600,000 and ₦400,000

B. ₦500,000 and ₦500,000

C. ₦400,000 and ₦600,000

D. ₦300,000 and ₦700,000

Correct Answer: A

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Question 14

A company uses the FIFO method to value its inventory. If the company has three items in its inventory, with costs of ₦100, ₦200, and ₦300, and the quantities are 10, 20, and 30 units, respectively, what is the cost of goods sold?

A. ₦3,000

Correct B. ₦4,000

C. ₦5,000

D. ₦6,000

Correct Answer: B

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Question 15

A company has a cash balance of ₦500,000 and a bank overdraft of ₦200,000. What is the company's net cash position?

Correct A. ₦300,000

B. ₦400,000

C. ₦500,000

D. ₦600,000

Correct Answer: A

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Question 16

A company purchased a machine for ₦500,000. The machine's useful life is 5 years, and it is expected to depreciate by 20% each year. Calculate the machine's value after 3 years.

A. ₦250,000

B. ₦300,000

Correct C. ₦350,000

D. ₦400,000

Correct Answer: C

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Question 17

A company issued 10,000 shares of ₦5 each at a premium of ₦2 per share. Calculate the total amount received from the issue of shares.

A. ₦50,000

B. ₦60,000

Correct C. ₦70,000

D. ₦80,000

Correct Answer: C

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Question 18

A company's trading account for the year ended 31st December 2020 is as follows: Sales: ₦1,500,000; Purchases: ₦1,000,000; Returns outwards: ₦50,000; Returns inwards: ₦20,000. Calculate the gross profit for the year.

A. ₦400,000

B. ₦450,000

Correct C. ₦500,000

D. ₦550,000

Correct Answer: C

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Question 19

A company's balance sheet as at 31st December 2020 is as follows: Assets: ₦2,000,000; Liabilities: ₦1,000,000; Capital: ₦1,000,000. Calculate the company's liquidity ratio.

A. 2:1

B. 3:1

Correct C. 4:1

D. 5:1

Correct Answer: C

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Question 20

A company issued 5,000 debentures of ₦100 each at a premium of ₦10 per debenture. Calculate the total amount received from the issue of debentures.

A. ₦500,000

B. ₦550,000

Correct C. ₦600,000

D. ₦650,000

Correct Answer: C

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Question 21

A company uses the single-entry system of accounting. The trial balance shows the following balances: Cash 10,000, Accounts Payable 5,000, and Common Stock 20,000. What is the net income for the period?

A. 5,000

B. 10,000

Correct C. 15,000

D. 20,000

Correct Answer: C

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Question 22

A partnership has two partners, A and B. Partner A has a 60% interest in the partnership and partner B has a 40% interest. The partnership has a net income of 100,000. What is partner A's share of the net income?

Correct A. 60,000

B. 80,000

C. 60,000

D. 40,000

Correct Answer: A

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Question 23

A company uses the double-entry system of accounting. The journal entry for the purchase of equipment is as follows: Debit Equipment 10,000 and Credit Cash 10,000. What is the effect of this transaction on the accounting equation?

Correct A. Increases Assets and Decreases Liabilities

B. Increases Assets and Increases Liabilities

C. Decreases Assets and Decreases Liabilities

D. Decreases Assets and Increases Liabilities

Correct Answer: A

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Question 24

A company has the following trial balance: Accounts Receivable 10,000, Sales Revenue 100,000, and Cost of Goods Sold 50,000. What is the gross profit for the period?

A. 50,000

Correct B. 75,000

C. 50,000

D. 25,000

Correct Answer: B

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Question 25

A partnership has two partners, A and B. Partner A has a 60% interest in the partnership and partner B has a 40% interest. The partnership has a net income of 100,000. What is partner B's share of the net income?

A. 40,000

Correct B. 60,000

C. 40,000

D. 20,000

Correct Answer: B

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