Practice post utme joseph ayo babalola university accounting 2020 Past Questions

Question 1

A partnership is formed between two individuals, A and B, with a capital of ₦500,000 each. The partnership agreement states that the profits will be shared in the ratio 3:2. If the profit for the year is ₦1,200,000, calculate the amount of profit that will be shared by A.

Correct A. ₦600,000

B. ₦400,000

C. ₦500,000

D. ₦800,000

Correct Answer: A

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Question 2

A company uses the double-entry system of accounting. The following transactions are recorded in the journal: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash | 10,000 | | | 1 Jan | Equipment | | 10,000 | | 15 Jan | Rent | | 5,000 | | 20 Jan | Sales | | 15,000 | What is the total amount of the debit entries?

A. ₦15,000

B. ₦20,000

Correct C. ₦25,000

D. ₦30,000

Correct Answer: C

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Question 3

A company uses the straight-line method of depreciation. The cost of a machine is ₦100,000 and its useful life is 5 years. If the machine is sold after 3 years, what is the amount of depreciation that will be recorded in the 3rd year?

A. ₦20,000

B. ₦30,000

Correct C. ₦40,000

D. ₦50,000

Correct Answer: C

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Question 4

A company's trading account for the year ended 31 December 2020 is as follows: | Particulars | ₦ | ₦ | | --- | --- | --- | | Sales | 1,200,000 | | | Purchases | 900,000 | | | Gross Profit | | 300,000 | What is the value of the gross profit?

Correct A. ₦300,000

B. ₦400,000

C. ₦500,000

D. ₦600,000

Correct Answer: A

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Question 5

A company's balance sheet as at 31 December 2020 is as follows: | Particulars | ₦ | ₦ | | --- | --- | --- | | Assets | 1,500,000 | | | Liabilities | 1,000,000 | | | Capital | | 500,000 | What is the value of the capital?

Correct A. ₦500,000

B. ₦600,000

C. ₦700,000

D. ₦800,000

Correct Answer: A

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Question 6

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 at the beginning of the year.

B. Capital is calculated at the end of the year.

C. Capital is calculated at the average of the beginning and end of the year.

Correct D. Capital is calculated at the beginning of the year and adjusted for the absence.

Correct Answer: D

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Question 7

A company has two departments: Manufacturing and Sales. The Manufacturing department has a direct labor cost of ₦1,500,000 and a direct material cost of ₦2,000,000. The Sales department has a direct labor cost of ₦800,000 and a direct material cost of ₦1,200,000. What is the total cost of goods sold?

A. ₦3,400,000

Correct B. ₦3,600,000

C. ₦3,800,000

D. ₦4,000,000

Correct Answer: B

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Question 8

A company's cash book shows a balance of ₦500,000. The bank statement shows a balance of ₦600,000. What is the difference between the two balances?

A. ₦50,000

Correct B. ₦100,000

C. ₦150,000

D. ₦200,000

Correct Answer: B

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Question 9

A company's financial statements show a net income of ₦1,000,000. The company's tax rate is 25%. What is the amount of income tax paid?

Correct A. ₦250,000

B. ₦300,000

C. ₦350,000

D. ₦400,000

Correct Answer: A

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Question 10

A government agency has a budget of ₦10,000,000. The agency has spent ₦8,000,000 so far. What is the percentage of the budget that has been spent?

Correct A. 80%

B. 85%

C. 90%

D. 95%

Correct Answer: A

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Question 11

In a self-balancing ledger, what is the purpose of the trial balance?

Correct A. To verify the accuracy of the ledger accounts

B. To identify any errors or discrepancies in the ledger accounts

C. To prepare the financial statements

D. To calculate the net worth of the business

Correct Answer: A

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Question 12

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 ₦1,000,000. What is the total direct labor cost for the company?

Correct A. ₦3,500,000

B. ₦3,250,000

C. ₦3,500,000

D. ₦3,250,000

Correct Answer: A

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Question 13

A partnership has two partners: John and Mary. John's capital account balance is ₦50,000 and Mary's capital account balance is ₦30,000. If the partnership distributes a dividend of ₦20,000, how much will John receive?

Correct A. ₦15,000

B. ₦10,000

C. ₦12,500

D. ₦20,000

Correct Answer: A

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Question 14

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

A. The cash book balance includes a deposit that has not been recorded in the bank statement

Correct B. The bank statement balance includes a credit that has not been recorded in the cash book

C. The cash book balance includes a credit that has not been recorded in the bank statement

D. The bank statement balance includes a deposit that has not been recorded in the cash book

Correct Answer: B

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Question 15

A company has a manufacturing department that produces two products: A and B. Product A has a direct material cost of ₦50,000 and a direct labor cost of ₦30,000. Product B has a direct material cost of ₦40,000 and a direct labor cost of ₦20,000. What is the total direct material cost for the company?

Correct A. ₦90,000

B. ₦80,000

C. ₦90,000

D. ₦80,000

Correct Answer: A

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Question 16

A company's trial balance shows a discrepancy of ₦5,000 between the debit and credit sides. The accountant suspects that the discrepancy is due to an error in the journal entries. Which of the following steps should the accountant take to correct the error?

Correct A. Reconcile the trial balance by investigating the journal entries

B. Recompute the trial balance from the ledger accounts

C. Adjust the trial balance by adding the discrepancy to the debit or credit side

D. Reopen the accounting period to correct the error

Correct Answer: A

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Question 17

A manufacturing company uses the process costing method to value its products. The company has two departments: Cutting and Assembly. The Cutting department has a production cost of ₦100,000 and the Assembly department has a production cost of ₦150,000. What is the total production cost of the product?

Correct A. ₦250,000

B. ₦200,000

C. ₦150,000

D. ₦100,000

Correct Answer: A

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Question 18

A company's balance sheet shows a current ratio of 2:1. The company's current assets are ₦200,000 and its current liabilities are ₦100,000. What is the company's quick ratio?

Correct A. 1:1

B. 2:1

C. 3:1

D. 4:1

Correct Answer: A

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Question 19

A company's trial balance shows a discrepancy of ₦5,000 between the debit and credit sides. The accountant suspects that the discrepancy is due to an error in the journal entries. Which of the following steps should the accountant take to correct the error?

Correct A. Reconcile the trial balance by investigating the journal entries

B. Recompute the trial balance from the ledger accounts

C. Adjust the trial balance by adding the discrepancy to the debit or credit side

D. Reopen the accounting period to correct the error

Correct Answer: A

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Question 20

A company's balance sheet shows a current ratio of 2:1. The company's current assets are ₦200,000 and its current liabilities are ₦100,000. What is the company's quick ratio?

Correct A. 1:1

B. 2:1

C. 3:1

D. 4:1

Correct Answer: A

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Question 21

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

Correct A. ₦475,000

B. ₦475,500

C. ₦475,000

D. ₦475,500

Correct Answer: A

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Question 22

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 | | 4 Jan | Bank | | 200 | What is the balance of the cash book?

A. ₦1,200

B. ₦1,400

Correct C. ₦1,200

D. ₦1,400

Correct Answer: C

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Question 23

A company's balance sheet as at 31 Dec 20XX is as follows: | Assets | ₦ | Liabilities | ₦ | | --- | --- | --- | --- | | Cash | 10,000 | Debentures | 20,000 | | Bank | 15,000 | Share Capital | 30,000 | | Stock | 25,000 | Profit & Loss | 10,000 | What is the total amount of liabilities?

A. ₦60,000

B. ₦65,000

C. ₦60,000

Correct D. ₦65,000

Correct Answer: D

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Question 24

A company's trading account for the year ended 31 Dec 20XX is as follows: | Particulars | ₦ | | --- | --- | --- | | Sales | 100,000 | | Purchases | 80,000 | | Cost of Goods Sold | | 20,000 | What is the gross profit?

A. ₦20,000

Correct B. ₦30,000

C. ₦20,000

D. ₦30,000

Correct Answer: B

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Question 25

A company's balance sheet as at 31 Dec 20XX is as follows: | Assets | ₦ | Liabilities | ₦ | | --- | --- | --- | --- | | Cash | 10,000 | Debentures | 20,000 | | Bank | 15,000 | Share Capital | 30,000 | | Stock | 25,000 | Profit & Loss | 10,000 | What is the total amount of assets?

A. ₦60,000

B. ₦65,000

C. ₦60,000

Correct D. ₦65,000

Correct Answer: D

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