Practice post utme covenant university accounting 2024 Past Questions

Question 1

A company uses the cash book to record all its financial transactions. The cash book shows a balance of ₦150,000. However, the bank statement shows a balance of ₦120,000. What is the reason for the difference?

A. The company has not recorded all its financial transactions.

B. The bank has charged a fee for the service.

C. The company has deposited cash into the bank but has not yet recorded it in the cash book.

Correct D. The company has withdrawn cash from the bank but has not yet recorded it in the cash book.

Correct Answer: D

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Question 2

A government agency is required to prepare a budget for the upcoming fiscal year. The budget must include a breakdown of all revenues and expenditures. What is the purpose of this budget?

A. To determine the agency's financial position at the end of the fiscal year.

B. To allocate resources to different departments within the agency.

Correct C. To provide a plan for the agency's financial activities for the upcoming fiscal year.

D. To identify areas where the agency can reduce costs.

Correct Answer: C

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Question 3

A company uses the double-entry system to record its financial transactions. The company's journal shows the following entry: Debit Cash ₦10,000, Credit Accounts Payable ₦10,000. What is the purpose of this entry?

A. To record a sale of goods to a customer.

Correct B. To record a purchase of goods from a supplier.

C. To record a payment made to a creditor.

D. To record a receipt of cash from a customer.

Correct Answer: B

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Question 4

A company prepares its final accounts for the year ended December 31, 2023. The company's trading account shows a profit of ₦500,000. However, the company's profit and loss account shows a loss of ₦200,000. What is the reason for the difference?

A. The company has not recorded all its financial transactions.

B. The company has made an error in its accounting records.

Correct C. The company has not provided for depreciation.

D. The company has not provided for bad debts.

Correct Answer: C

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Question 5

A company uses the single-entry system to record its financial transactions. The company's ledger shows the following entry: Debit Cash ₦20,000. What is the purpose of this entry?

A. To record a sale of goods to a customer.

B. To record a purchase of goods from a supplier.

C. To record a payment made to a creditor.

Correct D. To record a receipt of cash from a customer.

Correct Answer: D

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Question 6

A company uses the perpetual inventory system. On January 1, 2024, it had 1,000 units of a product in stock, costing ₦50 each. During the year, 500 units were sold, and 200 units were returned by customers. The company purchased 800 units at ₦60 each and 300 units at ₦70 each. Calculate the cost of goods sold for the year.

A. ₦25,000

Correct B. ₦30,000

C. ₦35,000

D. ₦40,000

Correct Answer: B

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Question 7

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 3 hours of direct labor and 2 hours of indirect labor. If the company works 160 hours of direct labor and 120 hours of indirect labor in a week, how many units of product X and product Y should be produced?

A. 10 units of X and 20 units of Y

B. 15 units of X and 30 units of Y

Correct C. 20 units of X and 40 units of Y

D. 25 units of X and 50 units of Y

Correct Answer: C

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Question 8

A company uses the FIFO method to value its inventory. On January 1, 2024, it had 1,000 units of a product in stock, costing ₦50 each. During the year, 500 units were sold, and 200 units were returned by customers. The company purchased 800 units at ₦60 each and 300 units at ₦70 each. Calculate the cost of goods sold for the year.

A. ₦28,000

Correct B. ₦30,000

C. ₦32,000

D. ₦35,000

Correct Answer: B

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Question 9

A company has the following transactions for the year ended December 31, 2024: Debit Cash: ₦100,000 Accounts Payable: ₦50,000 Credit Sales: ₦150,000 Cost of Goods Sold: ₦80,000 What is the net income for the year?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 10

A company has the following transactions for the year ended December 31, 2024: Debit Cash: ₦100,000 Accounts Payable: ₦50,000 Credit Sales: ₦150,000 Cost of Goods Sold: ₦80,000 What is the net income for the year?

A. ₦20,000

Correct B. ₦30,000

C. ₦40,000

D. ₦50,000

Correct Answer: B

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Question 11

A partnership is formed between two individuals, A and B, with a capital of ₦1,000,000 each. During the year, A withdraws ₦200,000 for personal use, while B invests an additional ₦300,000. The profit for the year is ₦500,000. Prepare the partnership's statement of profit or loss and the statement of changes in equity.

A. ₦1,200,000

B. ₦1,300,000

C. ₦1,400,000

Correct D. ₦1,500,000

Correct Answer: D

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Question 12

A company uses the perpetual inventory system. On January 1, it had 500 units of inventory with a cost of ₦100 each. During the month, 200 units were sold, and 300 units were purchased at a cost of ₦120 each. Prepare the journal entry to record the purchase and sale of inventory.

A. ₦24,000

Correct B. ₦26,000

C. ₦28,000

D. ₦30,000

Correct Answer: B

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Question 13

A company has the following trial balance as at December 31:

A. ₦1,500,000

B. ₦1,600,000

Correct C. ₦1,700,000

D. ₦1,800,000

Correct Answer: C

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Question 14

A company has the following transactions for the year:

A. ₦1,000,000

B. ₦1,200,000

C. ₦1,400,000

Correct D. ₦1,600,000

Correct Answer: D

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Question 15

A company has the following balance sheet as at December 31:

A. ₦1,500,000

B. ₦1,600,000

Correct C. ₦1,700,000

D. ₦1,800,000

Correct Answer: C

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Question 16

A company uses the weighted average method to value its inventory. The company has three types of inventory: raw materials, work-in-progress, and finished goods. The raw materials inventory has a cost of ₦120,000 and a quantity of 1,000 units. The work-in-progress inventory has a cost of ₦150,000 and a quantity of 500 units. The finished goods inventory has a cost of ₦180,000 and a quantity of 200 units. If the company uses a weighted average method to value its inventory, what is the total value of the inventory?

A. ₦450,000

Correct B. ₦480,000

C. ₦500,000

D. ₦520,000

Correct Answer: B

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Question 17

A company has the following transactions in its manufacturing account for the year: Raw Materials Purchased: ₦150,000 Work-in-Progress: ₦120,000 Finished Goods: ₦180,000 What is the total cost of goods manufactured for the year?

A. ₦450,000

Correct B. ₦480,000

C. ₦500,000

D. ₦520,000

Correct Answer: B

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Question 18

A company uses the perpetual inventory system. The company has the following transactions in its inventory account for the year: Purchases: ₦150,000 Sales: ₦180,000 What is the net change in inventory for the year?

Correct A. ₦30,000

B. ₦20,000

C. ₦10,000

D. ₦0

Correct Answer: A

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Question 19

A company has the following transactions in its trial balance for the year: Debit: ₦150,000 Credit: ₦120,000 What is the net change in the company's equity for the year?

Correct A. ₦30,000

B. ₦20,000

C. ₦10,000

D. ₦0

Correct Answer: A

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Question 20

A company uses the single-entry system. The company has the following transactions in its journal for the year: Debit: ₦150,000 Credit: ₦120,000 What is the net change in the company's equity for the year?

Correct A. ₦30,000

B. ₦20,000

C. ₦10,000

D. ₦0

Correct Answer: A

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Question 21

A company's cash book shows a debit balance of ₦120,000. The bank statement shows a credit balance of ₦150,000. The difference between the two balances is ₦30,000. What is the reason for this difference?

Correct A. The company has outstanding cheques

B. The company has deposited cash into the bank

C. The company has withdrawn cash from the bank

D. The company has a bank overdraft

Correct Answer: A

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Question 22

A company has two partners, A and B. The capital accounts of A and B are ₦100,000 and ₦80,000 respectively. The profit-sharing ratio is 3:2. What is the ratio of the dividends to be received by A and B?

Correct A. 3:2

B. 5:3

C. 4:3

D. 6:4

Correct Answer: A

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Question 23

A company issues 1,000 shares of ₦10 each at a premium of ₦5 per share. The total amount received from the issue of shares is ₦1,100,000. What is the amount received from the issue of shares at a premium?

A. ₦1,000,000

Correct B. ₦1,050,000

C. ₦1,100,000

D. ₦1,150,000

Correct Answer: B

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Question 24

A company's assets are ₦500,000, liabilities are ₦200,000, and equity is ₦300,000. What is the return on equity (ROE) of the company?

A. 60%

Correct B. 50%

C. 40%

D. 30%

Correct Answer: B

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Question 25

A company has a depreciation policy of 10% per annum on its assets. If the asset value is ₦100,000, what is the depreciation expense for the first year?

Correct A. ₦10,000

B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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