Practice post utme futa accounting 2019 Past Questions

Question 1

A company uses the double-entry system to record transactions. The following journal entry was made: Debit Cash 1,000, Credit Accounts Payable 1,000. What is the effect of this transaction on the accounting equation?

Correct A. Increases both assets and liabilities

B. Increases assets and decreases liabilities

C. Decreases assets and increases liabilities

D. Increases liabilities and decreases assets

Correct Answer: A

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Question 2

A company's trial balance shows the following accounts: Accounts Receivable 10,000, Sales Revenue 20,000. What is the correct journal entry to record the sale of goods on account?

A. Debit Accounts Receivable 10,000, Credit Sales Revenue 20,000

Correct B. Debit Sales Revenue 20,000, Credit Accounts Receivable 10,000

C. Debit Cash 10,000, Credit Sales Revenue 20,000

D. Debit Sales Revenue 20,000, Credit Cash 10,000

Correct Answer: B

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Question 3

A partnership has two partners, A and B. The partnership agreement states that profits and losses are shared in the ratio 3:2. If the partnership has a profit of 10,000, how much will each partner receive?

Correct A. Partner A: 6,000, Partner B: 4,000

B. Partner A: 4,000, Partner B: 6,000

C. Partner A: 5,000, Partner B: 5,000

D. Partner A: 7,000, Partner B: 3,000

Correct Answer: A

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Question 4

A government agency has the following transactions: Purchase of office supplies 5,000, Payment of salaries 10,000. What is the correct journal entry to record these transactions?

Correct A. Debit Office Supplies 5,000, Credit Salaries Expense 10,000

B. Debit Salaries Expense 10,000, Credit Office Supplies 5,000

C. Debit Cash 15,000, Credit Office Supplies 5,000 and Salaries Expense 10,000

D. Debit Office Supplies 5,000, Credit Cash 10,000

Correct Answer: A

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Question 5

A company has the following transactions: Sale of goods on account 20,000, Purchase of inventory 15,000. What is the correct journal entry to record these transactions?

A. Debit Accounts Receivable 20,000, Credit Sales Revenue 20,000

B. Debit Inventory 15,000, Credit Purchases 15,000

C. Debit Sales Revenue 20,000, Credit Accounts Receivable 20,000

Correct D. Debit Purchases 15,000, Credit Inventory 15,000

Correct Answer: D

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Question 6

A company's trial balance shows a debit balance of ₦15,000 in the 'Rent Received' account. Prepare the necessary journal entry to correct this error.

A. ₦15,000 debit to 'Rent Received' and ₦15,000 credit to 'Rent Paid'

Correct B. ₦15,000 debit to 'Rent Paid' and ₦15,000 credit to 'Rent Received'

C. ₦15,000 debit to 'Rent Received' and ₦15,000 credit to 'Cash'

D. ₦15,000 debit to 'Cash' and ₦15,000 credit to 'Rent Received'

Correct Answer: B

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Question 7

A company's cash book shows a balance of ₦20,000 in the 'Cash' account. However, the bank statement shows a balance of ₦18,000. Prepare the necessary bank reconciliation statement.

A. ₦2,000 bank overdraft

Correct B. ₦2,000 unrecorded deposit

C. ₦2,000 unrecorded withdrawal

D. ₦2,000 bank interest

Correct Answer: B

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Question 8

A company's balance sheet shows a total asset value of ₦100,000 and a total liability value of ₦80,000. Calculate the company's equity.

A. ₦20,000

B. ₦30,000

Correct C. ₦40,000

D. ₦50,000

Correct Answer: C

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Question 9

A company's profit and loss account shows a net profit of ₦50,000. However, the balance sheet shows a decrease in equity of ₦20,000. Calculate the company's retained earnings.

Correct A. ₦30,000

B. ₦40,000

C. ₦50,000

D. ₦60,000

Correct Answer: A

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Question 10

A company's trial balance shows a debit balance of ₦10,000 in the 'Salaries' account. Prepare the necessary journal entry to correct this error.

A. ₦10,000 debit to 'Salaries' and ₦10,000 credit to 'Cash'

Correct B. ₦10,000 debit to 'Cash' and ₦10,000 credit to 'Salaries'

C. ₦10,000 debit to 'Salaries' and ₦10,000 credit to 'Rent Received'

D. ₦10,000 debit to 'Rent Received' and ₦10,000 credit to 'Salaries'

Correct Answer: B

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Question 11

A company's trading account for the year ended 31st December 2019 shows a profit of ₦1,500,000. The balance sheet as at 31st December 2018 showed a capital of ₦2,000,000 and a profit and loss account balance of ₦500,000. If the company's capital as at 31st December 2019 is ₦3,500,000, what is the amount of drawings made by the proprietor during the year?

Correct A. ₦1,000,000

B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: A

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Question 12

A manufacturing company uses a job costing system. The following data are extracted from the company's records for the year ended 31st December 2019:

A. ₦1,000,000

Correct B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: B

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Question 13

A company's balance sheet as at 31st December 2018 showed a capital of ₦2,000,000 and a profit and loss account balance of ₦500,000. If the company's capital as at 31st December 2019 is ₦3,500,000 and the profit for the year ended 31st December 2019 is ₦1,500,000, what is the amount of drawings made by the proprietor during the year?

Correct A. ₦1,000,000

B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: A

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Question 14

A company's trading account for the year ended 31st December 2019 shows a profit of ₦1,500,000. The balance sheet as at 31st December 2018 showed a capital of ₦2,000,000 and a profit and loss account balance of ₦500,000. If the company's capital as at 31st December 2019 is ₦3,500,000, what is the amount of drawings made by the proprietor during the year?

Correct A. ₦1,000,000

B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: A

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Question 15

A manufacturing company uses a job costing system. The following data are extracted from the company's records for the year ended 31st December 2019:

A. ₦1,000,000

Correct B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: B

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Question 16

A company issued 5,000, 9% debentures of ₦100 each at a discount of 5%. The debentures are redeemable at the end of 5 years. Calculate the amount of discount on the debentures.

A. ₦250,000

Correct B. ₦500,000

C. ₦750,000

D. ₦1,000,000

Correct Answer: B

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Question 17

A company's trading account for the year ended 31st December 20X7 is as follows: Sales: ₦1,500,000; Purchases: ₦1,200,000; Carriage Inward: ₦50,000; Carriage Outward: ₦20,000. Calculate the cost of goods sold.

Correct A. ₦1,230,000

B. ₦1,250,000

C. ₦1,270,000

D. ₦1,300,000

Correct Answer: A

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Question 18

A company issued 10,000, 10% preference shares of ₦10 each at a premium of ₦2 per share. Calculate the amount of premium received on the issue of preference shares.

A. ₦20,000

B. ₦40,000

Correct C. ₦60,000

D. ₦80,000

Correct Answer: C

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Question 19

A company's balance sheet as at 31st December 20X7 is as follows: Fixed Assets ₦1,500,000; Current Assets ₦1,200,000; Capital and Reserves ₦2,000,000; Debentures ₦500,000. Calculate the amount of working capital.

A. ₦1,700,000

Correct B. ₦1,800,000

C. ₦1,900,000

D. ₦2,000,000

Correct Answer: B

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Question 20

A company's profit and loss account for the year ended 31st December 20X7 is as follows: Sales: ₦1,500,000; Purchases: ₦1,200,000; Gross Profit: ₦300,000; Operating Expenses: ₦150,000; Net Profit: ₦150,000. Calculate the gross profit percentage.

A. 20%

Correct B. 25%

C. 30%

D. 35%

Correct Answer: B

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Question 21

A company issued 5,000, 9% debentures of ₦100 each at a premium of ₦5 per share. The debentures are redeemable at the end of 5 years. Calculate the amount of premium received on the issue of debentures.

A. ₦25,000

B. ₦50,000

Correct C. ₦75,000

D. ₦100,000

Correct Answer: C

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Question 22

A company's trading account for the year ended 31st December 20X7 is as follows: Sales: ₦1,500,000; Purchases: ₦1,200,000; Carriage Inward: ₦50,000; Carriage Outward: ₦20,000. Calculate the cost of goods sold.

Correct A. ₦1,230,000

B. ₦1,250,000

C. ₦1,270,000

D. ₦1,300,000

Correct Answer: A

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Question 23

A company issued 10,000, 10% preference shares of ₦10 each at a premium of ₦2 per share. Calculate the amount of premium received on the issue of preference shares.

A. ₦20,000

B. ₦40,000

Correct C. ₦60,000

D. ₦80,000

Correct Answer: C

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Question 24

A company uses the weighted average method to value its inventory. The following data is available for the year ended December 31, 2022: Cost of goods available for sale: ₦1,500,000; Net realizable value of goods on hand: ₦1,200,000; Beginning inventory: ₦400,000; Purchases: ₦800,000. Calculate the cost of goods sold using the weighted average method.

A. ₦900,000

Correct B. ₦1,000,000

C. ₦1,200,000

D. ₦1,500,000

Correct Answer: B

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Question 25

A company has the following transactions related to its manufacturing accounts: Raw materials purchased: ₦300,000; Direct labor: ₦200,000; Factory overhead: ₦150,000; Work-in-progress: ₦100,000. Calculate the total cost of production.

A. ₦750,000

B. ₦800,000

Correct C. ₦850,000

D. ₦900,000

Correct Answer: C

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