Practice post utme eksu accounting 2023 Past Questions

Question 1

A company uses the cash book to record all its financial transactions. The cash book is a valuable tool for managing cash flows. However, it can be prone to errors if not properly maintained. Which of the following is a common error that can occur in the cash book?

A. Omitting to record a transaction

Correct B. Recording a transaction twice

C. Failing to reconcile the cash book with the bank statement

D. Using the wrong date for a transaction

Correct Answer: B

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Question 2

A company uses the double-entry system to record its financial transactions. The double-entry system requires that every transaction be recorded in at least two accounts. Which of the following is a characteristic of the double-entry system?

A. It is a simple system that only requires one account to be recorded

Correct B. It is a complex system that requires at least two accounts to be recorded

C. It is a system that only records cash transactions

D. It is a system that only records credit transactions

Correct Answer: B

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Question 3

A company uses the straight-line method to depreciate its assets. The straight-line method assumes that the asset will lose its value at a constant rate over its useful life. Which of the following is a characteristic of the straight-line method?

A. It assumes that the asset will lose its value at a decreasing rate over its useful life

Correct B. It assumes that the asset will lose its value at a constant rate over its useful life

C. It assumes that the asset will lose its value at an increasing rate over its useful life

D. It assumes that the asset will retain its value over its useful life

Correct Answer: B

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Question 4

A company uses the accrual basis of accounting to record its financial transactions. The accrual basis of accounting requires that revenues and expenses be recorded when earned or incurred, regardless of when cash is received or paid. Which of the following is a characteristic of the accrual basis of accounting?

A. It requires that revenues and expenses be recorded when cash is received or paid

Correct B. It requires that revenues and expenses be recorded when earned or incurred

C. It requires that revenues and expenses be recorded at the end of the accounting period

D. It requires that revenues and expenses be recorded at the beginning of the accounting period

Correct Answer: B

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Question 5

A company uses the cash basis of accounting to record its financial transactions. The cash basis of accounting requires that revenues and expenses be recorded when cash is received or paid. Which of the following is a characteristic of the cash basis of accounting?

A. It requires that revenues and expenses be recorded when earned or incurred

Correct B. It requires that revenues and expenses be recorded when cash is received or paid

C. It requires that revenues and expenses be recorded at the end of the accounting period

D. It requires that revenues and expenses be recorded at the beginning of the accounting period

Correct Answer: B

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Question 6

A company uses the straight-line method to depreciate its assets. If the asset's useful life is 5 years and the residual value is ₦0, what is the annual depreciation charge if the asset's cost is ₦120,000?

Correct A. ₦24,000

B. ₦20,000

C. ₦25,000

D. ₦30,000

Correct Answer: A

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Question 7

A business has the following transactions in its cash book: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Cash | 10,000 | | | 2nd Jan | Bank | | 5,000 | | 3rd Jan | Cash | | 8,000 | What is the balance in the cash account?

A. ₦2,000

Correct B. ₦8,000

C. ₦10,000

D. ₦12,000

Correct Answer: B

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Question 8

A company's trial balance shows the following balances: | Account | Debit | Credit | | --- | --- | --- | | Sales | | 100,000 | | Purchases | 80,000 | | | Wages | 20,000 | | | Rent | | 10,000 | What is the net profit?

A. ₦60,000

B. ₦70,000

Correct C. ₦80,000

D. ₦90,000

Correct Answer: C

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Question 9

A business has the following transactions in its bank reconciliation statement: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Bank | 10,000 | | | 2nd Jan | Cash | | 5,000 | | 3rd Jan | Bank | | 8,000 | What is the balance in the bank account?

A. ₦2,000

Correct B. ₦8,000

C. ₦10,000

D. ₦12,000

Correct Answer: B

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Question 10

A company's balance sheet shows the following balances: | Asset | Liability | Equity | | --- | --- | --- | | 100,000 | 50,000 | 50,000 | What is the ratio of equity to liability?

A. 1:1

Correct B. 1:2

C. 2:1

D. 3:1

Correct Answer: B

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Question 11

In a partnership account, what is the correct method of calculating the capital of a partner who has been absent for a year?

A. Capital is calculated as the average of the partner's capital for the previous and next year.

Correct B. Capital is calculated as the average of the partner's capital for the previous year and the current year.

C. Capital is calculated as the average of the partner's capital for the current year and the next year.

D. Capital is calculated as the average of the partner's capital for the previous year and the average of the partner's capital for the next two years.

Correct Answer: B

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Question 12

A company has two departments: Manufacturing and Sales. The Manufacturing department has a budget of ₦1,500,000 and the Sales department has a budget of ₦2,000,000. What is the total budget for the company?

A. ₦3,000,000

B. ₦3,500,000

Correct C. ₦4,000,000

D. ₦4,500,000

Correct Answer: C

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Question 13

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

A. ₦500,000

B. ₦550,000

C. ₦600,000

Correct D. ₦650,000

Correct Answer: D

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Question 14

A company has an incomplete record of its transactions. The record shows that the company has a credit balance of ₦50,000 in the cash account and a debit balance of ₦20,000 in the accounts payable account. What is the net effect on the company's financial position?

A. The company's financial position is improved.

B. The company's financial position is worsened.

Correct C. The company's financial position remains unchanged.

D. The company's financial position is neutral.

Correct Answer: C

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Question 15

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

A. ₦500,000

B. ₦550,000

C. ₦600,000

Correct D. ₦650,000

Correct Answer: D

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Question 16

A company's trial balance shows a debit balance of ₦25,000 in the account 'Rent Received'. The company's accounting policy requires that all rent received be recognized as revenue when received. However, the company's management has decided to recognize the rent received as revenue only when it is used. What is the correct accounting treatment for the debit balance of ₦25,000 in the account 'Rent Received'?

Correct A. Debit the Rent Received account and credit the Revenue account for ₦25,000.

B. Debit the Rent Received account and credit the Cash account for ₦25,000.

C. Debit the Rent Received account and credit the Accounts Payable account for ₦25,000.

D. Debit the Rent Received account and credit the Revenue account for ₦0.

Correct Answer: A

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Question 17

A company's bank statement shows a balance of ₦150,000. However, the company's cash book shows a balance of ₦200,000. What is the correct explanation for the difference?

A. The company has deposited ₦50,000 into the bank but has not yet been credited.

Correct B. The company has withdrawn ₦50,000 from the bank but has not yet been debited.

C. The company has written a cheque for ₦50,000 but has not yet been debited.

D. The company has received a bank transfer of ₦50,000 but has not yet been credited.

Correct Answer: B

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Question 18

A company's financial statements show a net profit of ₦500,000. However, the company's accounting policy requires that all profits be distributed to shareholders. What is the correct accounting treatment for the net profit of ₦500,000?

Correct A. Debit the Profit and Loss account and credit the Shareholders' Equity account for ₦500,000.

B. Debit the Shareholders' Equity account and credit the Profit and Loss account for ₦500,000.

C. Debit the Profit and Loss account and credit the Cash account for ₦500,000.

D. Debit the Cash account and credit the Profit and Loss account for ₦500,000.

Correct Answer: A

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Question 19

A company's manufacturing account shows a cost of goods sold of ₦1,000,000. However, the company's accounting policy requires that all costs be matched with revenues. What is the correct accounting treatment for the cost of goods sold of ₦1,000,000?

Correct A. Debit the Cost of Goods Sold account and credit the Inventory account for ₦1,000,000.

B. Debit the Inventory account and credit the Cost of Goods Sold account for ₦1,000,000.

C. Debit the Cost of Goods Sold account and credit the Accounts Payable account for ₦1,000,000.

D. Debit the Accounts Payable account and credit the Cost of Goods Sold account for ₦1,000,000.

Correct Answer: A

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Question 20

A company's partnership agreement requires that profits be distributed in the ratio of 2:3:5. However, the company's financial statements show a net profit of ₦500,000. What is the correct accounting treatment for the net profit of ₦500,000?

Correct A. Debit the Profit and Loss account and credit the Partners' Capital accounts in the ratio of 2:3:5 for ₦500,000.

B. Debit the Partners' Capital accounts and credit the Profit and Loss account in the ratio of 2:3:5 for ₦500,000.

C. Debit the Profit and Loss account and credit the Cash account for ₦500,000.

D. Debit the Cash account and credit the Profit and Loss account for ₦500,000.

Correct Answer: A

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Question 21

A company issues 10,000, 9% debentures of ₦100 each at a discount of 5%. Calculate the amount received from the debenture holders.

A. ₦900,000

B. ₦950,000

Correct C. ₦1,000,000

D. ₦1,050,000

Correct Answer: C

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Question 22

A manufacturing company has the following transactions for the month of January: Purchased raw materials on credit ₦50,000; sold goods on credit ₦80,000; purchased factory equipment for ₦20,000 cash; and paid salaries ₦15,000. Prepare a cash flow statement for the month.

A. ₦35,000

Correct B. ₦40,000

C. ₦45,000

D. ₦50,000

Correct Answer: B

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Question 23

A company's trial balance shows the following balances: Accounts Payable ₦30,000; Accounts Receivable ₦20,000; Common Stock ₦100,000; and Dividends ₦5,000. Prepare a balance sheet for the company.

A. ₦165,000

B. ₦170,000

Correct C. ₦175,000

D. ₦180,000

Correct Answer: C

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Question 24

A company has the following transactions for the month of January: Purchased raw materials on credit ₦50,000; sold goods on credit ₦80,000; purchased factory equipment for ₦20,000 cash; and paid salaries ₦15,000. Prepare a statement of cash flows for the month.

A. ₦35,000

Correct B. ₦40,000

C. ₦45,000

D. ₦50,000

Correct Answer: B

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Question 25

A company's bank reconciliation statement shows the following discrepancies: Outstanding checks ₦10,000; Deposits in transit ₦20,000; and Bank error ₦5,000. Calculate the corrected balance.

A. ₦35,000

Correct B. ₦40,000

C. ₦45,000

D. ₦50,000

Correct Answer: B

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