Practice post utme elizade university accounting 2020 Past Questions

Question 1

A company's trial balance shows a debit balance of ₦150,000 in the account 'Rent Received' and a credit balance of ₦120,000 in the account 'Rent Paid'. What is the correct journal entry to record the correction of this error?

A. ₦30,000 debit to Rent Paid and ₦30,000 credit to Rent Received

Correct B. ₦30,000 debit to Rent Received and ₦30,000 credit to Rent Paid

C. ₦30,000 debit to Rent Paid and ₦30,000 credit to Rent Received

D. ₦30,000 debit to Rent Received and ₦30,000 credit to Rent Paid

Correct Answer: B

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Question 2

A company uses the straight-line method of depreciation. The cost of a machine is ₦500,000 and its residual value is ₦50,000. If the machine is expected to last for 5 years, what is the annual depreciation charge?

Correct A. ₦80,000

B. ₦90,000

C. ₦100,000

D. ₦110,000

Correct Answer: A

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Question 3

A company's balance sheet shows a current asset of ₦200,000 in the account 'Accounts Receivable' and a current liability of ₦150,000 in the account 'Accounts Payable'. What is the net working capital of the company?

Correct A. ₦50,000

B. ₦100,000

C. ₦150,000

D. ₦200,000

Correct Answer: A

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Question 4

A company's trial balance shows a debit balance of ₦100,000 in the account 'Salaries Expense' and a credit balance of ₦120,000 in the account 'Salaries Payable'. What is the correct journal entry to record the correction of this error?

A. ₦20,000 debit to Salaries Expense and ₦20,000 credit to Salaries Payable

Correct B. ₦20,000 debit to Salaries Payable and ₦20,000 credit to Salaries Expense

C. ₦20,000 debit to Salaries Expense and ₦20,000 credit to Salaries Payable

D. ₦20,000 debit to Salaries Payable and ₦20,000 credit to Salaries Expense

Correct Answer: B

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Question 5

A company uses the double-declining balance method of depreciation. The cost of a machine is ₦600,000 and its residual value is ₦50,000. If the machine is expected to last for 5 years, what is the annual depreciation charge?

Correct A. ₦120,000

B. ₦140,000

C. ₦160,000

D. ₦180,000

Correct Answer: A

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Question 6

A company has two departments: Manufacturing and Sales. The Manufacturing department has a fixed cost of ₦120,000 and a variable cost of ₦15 per unit produced. The Sales department has a fixed cost of ₦80,000 and a commission of 10% on sales. If the company sold 10,000 units at ₦50 per unit, what is the total profit?

A. ₦420,000

Correct B. ₦520,000

C. ₦620,000

D. ₦720,000

Correct Answer: B

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Question 7

A partnership has two partners, A and B. Partner A has a 60% interest in the partnership and Partner B has a 40% interest. If the partnership has a profit of ₦240,000, how much will Partner A receive?

Correct A. ₦144,000

B. ₦144,000

C. ₦144,000

D. ₦144,000

Correct Answer: A

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Question 8

A company uses the straight-line method of depreciation. If the cost of the asset is ₦120,000 and its useful life is 5 years, what is the annual depreciation?

Correct A. ₦24,000

B. ₦24,000

C. ₦24,000

D. ₦24,000

Correct Answer: A

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Question 9

A company has a balance sheet that shows a total asset of ₦500,000 and a total liability of ₦300,000. What is the equity?

Correct A. ₦200,000

B. ₦200,000

C. ₦200,000

D. ₦200,000

Correct Answer: A

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Question 10

A company has a profit of ₦240,000 and a loss of ₦120,000. What is the net profit?

Correct A. ₦120,000

B. ₦120,000

C. ₦120,000

D. ₦120,000

Correct Answer: A

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Question 11

A company purchases a machine for ₦250,000. The machine has a useful life of 5 years and a residual value of ₦20,000. Calculate the annual depreciation using the straight-line method.

A. ₦40,000

B. ₦50,000

Correct C. ₦45,000

D. ₦48,000

Correct Answer: C

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Question 12

A trader purchases goods for ₦120,000 and sells them for ₦180,000. Calculate the profit made by the trader.

Correct A. ₦60,000

B. ₦80,000

C. ₦60,000

D. ₦80,000

Correct Answer: A

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Question 13

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

A. ₦10,000

B. ₦15,000

C. ₦12,000

Correct D. ₦18,000

Correct Answer: D

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Question 14

A company purchases a machine for ₦150,000. The machine has a useful life of 5 years and a residual value of ₦10,000. Calculate the annual depreciation using the reducing balance method.

A. ₦25,000

B. ₦30,000

Correct C. ₦28,000

D. ₦32,000

Correct Answer: C

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Question 15

A company issues 500 shares of ₦20 each at a premium of ₦10 per share. Calculate the total amount received from the issue of shares.

A. ₦15,000

B. ₦20,000

C. ₦18,000

Correct D. ₦22,000

Correct Answer: D

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Question 16

A company has two departments: Manufacturing and Sales. The Manufacturing department has a direct labor cost of ₦1,500,000 and an indirect labor cost of ₦750,000. The Sales department has a direct labor cost of ₦2,000,000 and an indirect labor cost of ₦1,250,000. What is the total labor cost for the company?

A. ₦4,500,000

Correct B. ₦6,000,000

C. ₦7,500,000

D. ₦9,000,000

Correct Answer: B

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Question 17

A company has a trial balance that includes the following accounts: Cash, Accounts Receivable, Inventory, and Equipment. The trial balance shows a debit balance of ₦1,500,000 for Cash and a credit balance of ₦2,000,000 for Accounts Receivable. What is the net effect on the accounting equation?

A. Increase in assets and decrease in liabilities

B. Decrease in assets and increase in liabilities

Correct C. Increase in assets and increase in liabilities

D. Decrease in assets and decrease in liabilities

Correct Answer: C

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Question 18

A company has a partnership with two partners: John and Jane. The partnership agreement states that John will receive 60% of the profits and Jane will receive 40% of the profits. If the partnership earns a profit of ₦1,500,000, how much will John receive?

Correct A. ₦900,000

B. ₦1,000,000

C. ₦1,200,000

D. ₦1,500,000

Correct Answer: A

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Question 19

A company has a balance sheet that shows the following accounts: Cash, Accounts Receivable, Inventory, and Equipment. The balance sheet shows a total asset value of ₦5,000,000 and a total liability value of ₦2,500,000. What is the net worth of the company?

A. ₦2,500,000

B. ₦3,000,000

C. ₦3,500,000

Correct D. ₦4,000,000

Correct Answer: D

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Question 20

A company has a partnership with two partners: John and Jane. The partnership agreement states that John will receive 60% of the profits and Jane will receive 40% of the profits. If the partnership earns a profit of ₦1,500,000, how much will Jane receive?

A. ₦600,000

B. ₦700,000

C. ₦800,000

Correct D. ₦900,000

Correct Answer: D

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Question 21

In a public sector accounting system, what is the primary purpose of the 'Cash Book'?

A. To record all financial transactions of the government.

B. To prepare the annual budget of the government.

Correct C. To maintain a record of cash receipts and payments.

D. To prepare the financial statements of the government.

Correct Answer: C

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Question 22

A company has two partners, A and B, who share profits in the ratio 3:2. If the total profit for the year is ₦120,000, how much will A receive?

Correct A. ₦90,000

B. ₦80,000

C. ₦60,000

D. ₦40,000

Correct Answer: A

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Question 23

A manufacturing company produces two products, X and Y. The selling price of X is ₦500 per unit, and the selling price of Y is ₦300 per unit. If the company sells 200 units of X and 300 units of Y, what is the total revenue?

A. ₦250,000

B. ₦280,000

Correct C. ₦300,000

D. ₦320,000

Correct Answer: C

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Question 24

A company has a departmental account for the 'Selling Department'. The department's expenses for the year are ₦150,000, and the department's revenue for the year is ₦200,000. What is the department's net profit?

A. ₦50,000

Correct B. ₦60,000

C. ₦70,000

D. ₦80,000

Correct Answer: B

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Question 25

A company uses the double-entry system of accounting. The company's assets are ₦500,000, and the company's liabilities are ₦200,000. What is the company's equity?

A. ₦300,000

Correct B. ₦400,000

C. ₦500,000

D. ₦600,000

Correct Answer: B

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