POST UTME MADONNA UNIVERSITY 2023 Accounting | Objective

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Question 1
A company uses the double-entry system of accounting. The following transactions were recorded during the month of January:
A. Debit Cash 1,000 and Credit Accounts Receivable 1,000
Correct B. Debit Accounts Receivable 1,000 and Credit Cash 1,000
C. Debit Cash 1,000 and Credit Accounts Payable 1,000
D. Debit Accounts Payable 1,000 and Credit Cash 1,000

Correct Answer: B

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Question 2
A company's trial balance as of December 31, 2022, is as follows:
Correct A. Debit 10,000 and Credit 10,000
B. Debit 5,000 and Credit 5,000
C. Debit 15,000 and Credit 15,000
D. Debit 20,000 and Credit 20,000

Correct Answer: A

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Question 3
A company uses the single-entry system of accounting. The following transactions were recorded during the month of January:
Correct A. Debit Cash 1,000 and Credit Accounts Receivable 1,000
B. Debit Accounts Receivable 1,000 and Credit Cash 1,000
C. Debit Cash 1,000 and Credit Accounts Payable 1,000
D. Debit Accounts Payable 1,000 and Credit Cash 1,000

Correct Answer: A

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Question 4
A company's ledger accounts as of December 31, 2022, are as follows:
Correct A. Debit 10,000 and Credit 10,000
B. Debit 5,000 and Credit 5,000
C. Debit 15,000 and Credit 15,000
D. Debit 20,000 and Credit 20,000

Correct Answer: A

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Question 5
A company's trial balance as of December 31, 2022, is as follows:
Correct A. Debit 10,000 and Credit 10,000
B. Debit 5,000 and Credit 5,000
C. Debit 15,000 and Credit 15,000
D. Debit 20,000 and Credit 20,000

Correct Answer: A

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Question 6
A partnership is formed between two individuals, John and Mary, with a capital contribution of ₦500,000 and ₦300,000 respectively. The partnership agreement states that profits and losses will be shared in the ratio 3:2. If the partnership makes a profit of ₦150,000, what is John's share of the profit?
Correct A. ₦225,000
B. ₦300,000
C. ₦375,000
D. ₦450,000

Correct Answer: A

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Question 7
A company uses the double-entry system of accounting. The following transactions are recorded in the journal: Debit Cash ₦10,000, Credit Accounts Payable ₦10,000. What is the effect of this transaction on the accounting equation?
Correct A. Assets increase by ₦10,000, Liabilities increase by ₦10,000
B. Assets decrease by ₦10,000, Liabilities decrease by ₦10,000
C. Assets increase by ₦10,000, Liabilities decrease by ₦10,000
D. Assets decrease by ₦10,000, Liabilities increase by ₦10,000

Correct Answer: A

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Question 8
A public sector organization has the following transactions: Salaries ₦1,000,000, Rent ₦500,000, Utilities ₦200,000. What is the total amount of expenses for the period?
Correct A. ₦1,700,000
B. ₦1,800,000
C. ₦1,900,000
D. ₦2,000,000

Correct Answer: A

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Question 9
A company has the following trial balance: Cash ₦500,000, Accounts Payable ₦200,000, Common Stock ₦300,000. What is the total amount of assets?
Correct A. ₦700,000
B. ₦800,000
C. ₦900,000
D. ₦1,000,000

Correct Answer: A

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Question 10
A partnership is formed between three individuals, John, Mary, and David, with a capital contribution of ₦500,000, ₦300,000, and ₦200,000 respectively. The partnership agreement states that profits and losses will be shared in the ratio 3:2:1. If the partnership makes a profit of ₦150,000, what is David's share of the profit?
Correct A. ₦25,000
B. ₦30,000
C. ₦35,000
D. ₦40,000

Correct Answer: A

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Question 11
A manufacturing company uses a job costing system. The company has two departments: Cutting and Assembly. The Cutting department incurred costs of ₦120,000 for direct materials and ₦80,000 for direct labor. The Assembly department incurred costs of ₦150,000 for direct materials and ₦100,000 for direct labor. The company's total overhead costs for the period were ₦200,000. Prepare a departmental income statement for the Cutting department.
A. ₦200,000
Correct B. ₦220,000
C. ₦240,000
D. ₦260,000

Correct Answer: B

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Question 12
A company's balance sheet as at 31st December, 2022 is as follows: ₦ Assets: Cash and Bank Balances: ₦120,000 Accounts Receivable: ₦80,000 Inventory: ₦150,000 Total Assets: ₦350,000 Liabilities: Accounts Payable: ₦100,000 Long-term Debt: ₦200,000 Total Liabilities: ₦300,000 Equity: Common Stock: ₦50,000 Retained Earnings: ₦0 Total Equity: ₦50,000 Total Liabilities and Equity: ₦350,000 What is the company's current ratio?
Correct A. 1.17
B. 1.33
C. 1.50
D. 1.67

Correct Answer: A

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Question 13
A company's cash book shows the following transactions: Date | Description | Debit | Credit 2022-01-01 | Cash | ₦100,000 | 2022-01-05 | Sales | ₦150,000 | 2022-01-10 | Purchases | ₦80,000 | 2022-01-15 | Cash | ₦120,000 | What is the company's cash balance as at 31st January, 2022?
A. ₦220,000
B. ₦240,000
Correct C. ₦260,000
D. ₦280,000

Correct Answer: C

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Question 14
A company's trial balance as at 31st December, 2022 is as follows: ₦ Account | Debit | Credit Cash and Bank Balances | ₦120,000 | Accounts Receivable | ₦80,000 | Inventory | ₦150,000 | Accounts Payable | ₦100,000 | Long-term Debt | ₦200,000 | Common Stock | ₦50,000 | Retained Earnings | ₦0 | Total Debit | ₦600,000 | Total Credit | ₦600,000 | What is the company's net income for the year?
A. ₦50,000
B. ₦60,000
C. ₦70,000
Correct D. ₦80,000

Correct Answer: D

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Question 15
A company's balance sheet as at 31st December, 2022 is as follows: ₦ Assets: Cash and Bank Balances: ₦120,000 Accounts Receivable: ₦80,000 Inventory: ₦150,000 Total Assets: ₦350,000 Liabilities: Accounts Payable: ₦100,000 Long-term Debt: ₦200,000 Total Liabilities: ₦300,000 Equity: Common Stock: ₦50,000 Retained Earnings: ₦0 Total Equity: ₦50,000 Total Liabilities and Equity: ₦350,000 What is the company's debt-to-equity ratio?
A. 1.00
Correct B. 1.33
C. 1.67
D. 2.00

Correct Answer: B

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Question 16
A company's trial balance shows a debit balance of ₦15,000 in the 'Rent Expense' account. However, the company's accounting records show that the rent expense for the year was ₦20,000. What is the correct journal entry to correct the error?
A. ₦5,000 debit to Rent Expense and ₦5,000 credit to Cash
Correct B. ₦20,000 debit to Rent Expense and ₦20,000 credit to Cash
C. ₦5,000 debit to Rent Expense and ₦5,000 credit to Rent Payable
D. ₦20,000 debit to Rent Expense and ₦20,000 credit to Rent Payable

Correct Answer: B

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Question 17
A partnership has two partners, A and B. The partnership agreement states that profits and losses are to be shared in the ratio 3:2. If the net profit for the year is ₦120,000, how much will partner A receive?
Correct A. ₦90,000
B. ₦60,000
C. ₦72,000
D. ₦108,000

Correct Answer: A

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Question 18
A company's balance sheet shows a current ratio of 2:1. If the company's current assets are ₦150,000 and its current liabilities are ₦75,000, what is the correct formula for the current ratio?
Correct A. Current Assets ÷ Current Liabilities
B. Current Liabilities ÷ Current Assets
C. (Current Assets - Current Liabilities) ÷ Current Liabilities
D. (Current Assets + Current Liabilities) ÷ Current Assets

Correct Answer: A

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Question 19
A company's trial balance shows a credit balance of ₦10,000 in the 'Salaries Expense' account. However, the company's accounting records show that the salaries expense for the year was ₦15,000. What is the correct journal entry to correct the error?
A. ₦5,000 credit to Salaries Expense and ₦5,000 debit to Cash
Correct B. ₦15,000 credit to Salaries Expense and ₦15,000 debit to Cash
C. ₦5,000 credit to Salaries Expense and ₦5,000 debit to Salaries Payable
D. ₦15,000 credit to Salaries Expense and ₦15,000 debit to Salaries Payable

Correct Answer: B

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Question 20
A company's balance sheet shows a total assets of ₦500,000 and a total liabilities of ₦200,000. What is the company's equity?
Correct A. ₦300,000
B. ₦200,000
C. ₦500,000
D. ₦300,000

Correct Answer: A

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Question 21
The following ledger account is for a manufacturing company. The company uses a job costing system. The ledger account shows the following transactions: Debit: Raw Materials 10,000, Work-in-Progress 15,000 Credit: Sales 25,000 What is the correct balance of the Work-in-Progress account?
A. 30,000
B. 20,000
Correct C. 15,000
D. 10,000

Correct Answer: C

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Question 22
A company uses the following accounts in its general ledger: Cash, Accounts Receivable, Accounts Payable, Common Stock, Retained Earnings, and Dividends. Which of the following accounts is NOT a balance sheet account?
A. Cash
B. Accounts Receivable
Correct C. Dividends
D. Common Stock

Correct Answer: C

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Question 23
A company has the following transactions: Debit: Raw Materials 10,000, Work-in-Progress 15,000 Credit: Sales 25,000 What is the correct balance of the Work-in-Progress account?
A. 30,000
B. 20,000
Correct C. 15,000
D. 10,000

Correct Answer: C

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Question 24
A company uses the following accounts in its general ledger: Cash, Accounts Receivable, Accounts Payable, Common Stock, Retained Earnings, and Dividends. Which of the following accounts is NOT a balance sheet account?
A. Cash
B. Accounts Receivable
Correct C. Dividends
D. Common Stock

Correct Answer: C

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Question 25
A company has the following transactions: Debit: Raw Materials 10,000, Work-in-Progress 15,000 Credit: Sales 25,000 What is the correct balance of the Work-in-Progress account?
A. 30,000
B. 20,000
Correct C. 15,000
D. 10,000

Correct Answer: C

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