Practice post utme bowen university accounting 2020 Past Questions

Question 1

A company uses the weighted average method to value its inventory. The cost of goods available for sale is ₦1,500,000. The beginning inventory is ₦300,000, and the cost of the current period's purchases is ₦1,200,000. If the company uses a periodic inventory system, what is the cost of goods sold?

Correct A. ₦900,000

B. ₦1,200,000

C. ₦1,500,000

D. ₦2,100,000

Correct Answer: A

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Question 2

A manufacturing company produces two products, A and B. Product A requires 2 hours of direct labor and 3 hours of indirect labor, while product B requires 3 hours of direct labor and 2 hours of indirect labor. If the company has a total of 120 hours of direct labor and 180 hours of indirect labor available, how many units of product A and product B should the company produce to maximize profit?

Correct A. (20, 30)

B. (30, 20)

C. (40, 10)

D. (10, 40)

Correct Answer: A

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Question 3

A company's trial balance shows a discrepancy of ₦1,500 between the debit and credit balances. The company's accounting records show that a payment of ₦2,000 was made to a supplier, but the supplier's invoice was not recorded in the accounts. The company's cash account shows a balance of ₦8,000. What is the correct journal entry to rectify the discrepancy?

A. Debit Cash ₦2,000, Credit Accounts Payable ₦2,000

Correct B. Debit Accounts Payable ₦2,000, Credit Cash ₦2,000

C. Debit Cash ₦1,500, Credit Accounts Payable ₦1,500

D. Debit Accounts Payable ₦1,500, Credit Cash ₦1,500

Correct Answer: B

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Question 4

A partnership has two partners, A and B, who share profits and losses in the ratio 3:2. The partnership's capital account balance is ₦50,000. If A withdraws ₦10,000 from the partnership, what is the new balance of A's capital account?

Correct A. ₦30,000

B. ₦35,000

C. ₦40,000

D. ₦45,000

Correct Answer: A

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Question 5

A company's balance sheet shows a current asset of ₦20,000 and a non-current liability of ₦30,000. If the company's equity is ₦50,000, what is the total amount of the company's assets?

A. ₦60,000

B. ₦70,000

C. ₦80,000

Correct D. ₦90,000

Correct Answer: D

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Question 6

A company's trial balance shows a discrepancy of ₦1,500 between the debit and credit balances. The company's accounting records show that a payment of ₦2,000 was made to a supplier, but the supplier's invoice was not recorded in the accounts. The company's cash account shows a balance of ₦8,000. What is the correct journal entry to rectify the discrepancy?

A. Debit Cash ₦2,000, Credit Accounts Payable ₦2,000

Correct B. Debit Accounts Payable ₦2,000, Credit Cash ₦2,000

C. Debit Cash ₦1,500, Credit Accounts Payable ₦1,500

D. Debit Accounts Payable ₦1,500, Credit Cash ₦1,500

Correct Answer: B

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Question 7

A partnership has two partners, A and B, who share profits and losses in the ratio 3:2. The partnership's capital account balance is ₦50,000. If A withdraws ₦10,000 from the partnership, what is the new balance of A's capital account?

Correct A. ₦30,000

B. ₦35,000

C. ₦40,000

D. ₦45,000

Correct Answer: A

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Question 8

A company issued 10,000 shares of £ 1 each at a premium of £ 0.50 per share. The shares were issued for £ 1.50 per share. Calculate the amount received from the issue of shares.

A. ₦15,000

Correct B. ₦20,000

C. ₦25,000

D. ₦30,000

Correct Answer: B

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Question 9

A company's cash book shows the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 1,000 | | | 2 Jan | Bank | | 500 | | 3 Jan | Cash | | 800 | What is the balance of the cash book?

A. ₦1,200

B. ₦1,800

Correct C. ₦2,000

D. ₦2,500

Correct Answer: C

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Question 10

A company's balance sheet shows the following: | Assets | ₦ | Liabilities | ₦ | | --- | --- | --- | --- | | Cash | 10,000 | Bank Loan | 20,000 | | Debtors | 15,000 | Share Capital | 30,000 | | Stock | 20,000 | Retained Earnings | 25,000 | What is the total amount of liabilities?

A. ₦75,000

B. ₦80,000

C. ₦85,000

Correct D. ₦90,000

Correct Answer: D

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Question 11

A company issued 5,000 debentures of ₦100 each at a premium of ₦10 per debenture. The debentures were issued for ₦120 each. Calculate the amount received from the issue of debentures.

A. ₦600,000

B. ₦650,000

C. ₦700,000

Correct D. ₦750,000

Correct Answer: D

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Question 12

A company's cash book shows the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 2,000 | | | 2 Jan | Bank | | 1,500 | | 3 Jan | Cash | | 1,200 | What is the balance of the cash book?

A. ₦1,400

B. ₦1,600

Correct C. ₦1,800

D. ₦2,000

Correct Answer: C

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Question 13

A company uses the straight-line method to depreciate its assets. If the asset has a useful life of 5 years and a residual value of ₦50,000, what is the annual depreciation charge if the asset cost ₦250,000?

A. ₦40,000

Correct B. ₦45,000

C. ₦50,000

D. ₦55,000

Correct Answer: B

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Question 14

A partnership has two partners, A and B. Partner A has a 60% interest in the profits and Partner B has a 40% interest. If the profits for the year are ₦120,000, how much will Partner A receive?

Correct A. ₦72,000

B. ₦80,000

C. ₦90,000

D. ₦100,000

Correct Answer: A

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Question 15

A company has the following transactions: Purchased office supplies for ₦10,000, Paid salaries of ₦50,000, and Collected cash from customers of ₦80,000. What is the net change in cash?

A. ₦20,000

B. ₦30,000

Correct C. ₦40,000

D. ₦50,000

Correct Answer: C

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Question 16

A company uses the accrual basis of accounting. If the company has accounts payable of ₦100,000 and accounts receivable of ₦80,000, what is the net change in working capital?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 17

A company has the following transactions: Purchased land for ₦500,000, and Sold goods for ₦200,000. What is the net change in assets?

A. ₦300,000

Correct B. ₦400,000

C. ₦500,000

D. ₦600,000

Correct Answer: B

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Question 18

A company's trial balance shows a debit balance of ₦50,000 in the account 'Rent Received'. However, the company's accounting records show that the rent was actually paid to the landlord. What is the correct treatment for this error?

A. Debit the 'Rent Received' account and credit the 'Rent Paid' account.

Correct B. Debit the 'Rent Paid' account and credit the 'Rent Received' account.

C. Debit the 'Rent Received' account and credit the 'Rent Paid' account.

D. Do nothing, as the trial balance is correct.

Correct Answer: B

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Question 19

A manufacturing company produces two products, X and Y. Product X requires 2 hours of direct labor and 1 hour of indirect labor, while product Y requires 1 hour of direct labor and 2 hours of indirect labor. If the company produces 100 units of product X and 50 units of product Y, what is the total direct labor cost?

A. ₦150,000

B. ₦200,000

Correct C. ₦250,000

D. ₦300,000

Correct Answer: C

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Question 20

A company's cash book shows a balance of ₦100,000. However, the company's bank statement shows a balance of ₦120,000. What is the reason for the difference?

A. The company has deposited ₦20,000 into the bank.

Correct B. The company has withdrawn ₦20,000 from the bank.

C. The bank has charged the company a fee of ₦20,000.

D. The company has received a credit of ₦20,000 from the bank.

Correct Answer: B

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Question 21

A government agency is responsible for collecting taxes on behalf of the government. The agency's accounting records show that it has collected ₦500,000 in taxes but has not remitted the amount to the government. What is the correct treatment for this transaction?

A. Debit the 'Taxes Collected' account and credit the 'Taxes Remitted' account.

B. Debit the 'Taxes Remitted' account and credit the 'Taxes Collected' account.

Correct C. Debit the 'Taxes Collected' account and credit the 'Government' account.

D. Do nothing, as the transaction is not material.

Correct Answer: C

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Question 22

A company's financial statements show a net income of ₦200,000. However, the company's tax return shows a tax liability of ₦50,000. What is the reason for the difference?

Correct A. The company has claimed a tax deduction of ₦50,000.

B. The company has paid a tax penalty of ₦50,000.

C. The company has received a tax refund of ₦50,000.

D. The company has not remitted the tax liability.

Correct Answer: A

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Question 23

A company's balance sheet shows a current ratio of 2:1. However, the company's cash flow statement shows a negative cash flow from operations. What is the reason for the difference?

A. The company has invested in a new project.

B. The company has paid a dividend to its shareholders.

C. The company has received a loan from a bank.

Correct D. The company has not managed its working capital effectively.

Correct Answer: D

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Question 24

A company's financial statements show a net income of ₦300,000. However, the company's tax return shows a tax liability of ₦100,000. What is the reason for the difference?

Correct A. The company has claimed a tax deduction of ₦100,000.

B. The company has paid a tax penalty of ₦100,000.

C. The company has received a tax refund of ₦100,000.

D. The company has not remitted the tax liability.

Correct Answer: A

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Question 25

A company's balance sheet shows a current ratio of 1:1. However, the company's cash flow statement shows a positive cash flow from operations. What is the reason for the difference?

A. The company has invested in a new project.

B. The company has paid a dividend to its shareholders.

C. The company has received a loan from a bank.

Correct D. The company has managed its working capital effectively.

Correct Answer: D

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