POST UTME MOUNTAIN TOP UNIVERSITY 2023 Accounting | Objective

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Question 1
A company's trial balance shows a debit balance of ₦15,000 in the account 'Rent Received' and a credit balance of ₦20,000 in the account 'Rent Paid'. What is the correct journal entry to rectify this error?
A. ₦5,000 debit to Rent Received and ₦5,000 credit to Rent Paid
Correct B. ₦5,000 debit to Rent Paid and ₦5,000 credit to Rent Received
C. ₦10,000 debit to Rent Received and ₦10,000 credit to Rent Paid
D. ₦10,000 debit to Rent Paid and ₦10,000 credit to Rent Received

Correct Answer: B

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Question 2
A bank statement shows a balance of ₦50,000, but the cash book balance is ₦60,000. The bank statement shows a debit of ₦10,000 for 'Bank Charges' and a credit of ₦20,000 for 'Interest Received'. What is the correct bank reconciliation statement?
Correct A. ₦10,000 debit to Bank Charges and ₦20,000 credit to Interest Received
B. ₦10,000 credit to Bank Charges and ₦20,000 debit to Interest Received
C. ₦30,000 debit to Bank Charges and ₦30,000 credit to Interest Received
D. ₦30,000 credit to Bank Charges and ₦30,000 debit to Interest Received

Correct Answer: A

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Question 3
A company's ledger shows a debit balance of ₦20,000 in the account 'Salaries' and a credit balance of ₦15,000 in the account 'Wages'. What is the correct journal entry to rectify this error?
A. ₦5,000 debit to Salaries and ₦5,000 credit to Wages
Correct B. ₦5,000 debit to Wages and ₦5,000 credit to Salaries
C. ₦5,000 debit to Salaries and ₦5,000 credit to Rent Paid
D. ₦5,000 debit to Rent Paid and ₦5,000 credit to Salaries

Correct Answer: B

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Question 4
A company's trial balance shows a debit balance of ₦30,000 in the account 'Purchases' and a credit balance of ₦25,000 in the account 'Sales'. What is the correct journal entry to rectify this error?
A. ₦5,000 debit to Purchases and ₦5,000 credit to Sales
Correct B. ₦5,000 debit to Sales and ₦5,000 credit to Purchases
C. ₦10,000 debit to Purchases and ₦10,000 credit to Sales
D. ₦10,000 debit to Sales and ₦10,000 credit to Purchases

Correct Answer: B

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Question 5
A company's ledger shows a debit balance of ₦40,000 in the account 'Rent Paid' and a credit balance of ₦35,000 in the account 'Rent Received'. What is the correct journal entry to rectify this error?
A. ₦5,000 debit to Rent Paid and ₦5,000 credit to Rent Received
Correct B. ₦5,000 debit to Rent Received and ₦5,000 credit to Rent Paid
C. ₦10,000 debit to Rent Paid and ₦10,000 credit to Rent Received
D. ₦10,000 debit to Rent Received and ₦10,000 credit to Rent Paid

Correct Answer: B

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Question 6
A company issued 10,000 shares of ₦1 par value at a premium of ₦0.50 per share. Calculate the total amount received from the issue of shares.
A. ₦0,500,000
B. ₦1,000,000
Correct C. ₦1,050,000
D. ₦1,500,000

Correct Answer: C

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Question 7
A company issued 10,000 shares of ₦5 each at a premium of ₦2. Calculate the total amount received from the issue of shares.
A. ₦50,000
B. ₦100,000
Correct C. ₦150,000
D. ₦200,000

Correct Answer: C

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Question 8
A company's trading account for the year ended 31st December 2022 is as follows: Sales: ₦1,500,000; Purchases: ₦1,200,000; Returns Outwards: ₦20,000; Returns Inwards: ₦15,000. Calculate the gross profit for the year.
A. ₦150,000
B. ₦200,000
Correct C. ₦250,000
D. ₦300,000

Correct Answer: C

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Question 9
A company's balance sheet as at 31st December 2022 is as follows: Equity Share Capital: ₦500,000; Profit and Loss Account: ₦300,000; Drawings: ₦20,000. Calculate the total equity of the company.
Correct A. ₦820,000
B. ₦820,000
C. ₦820,000
D. ₦820,000

Correct Answer: A

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Question 10
A company issued 5-year debentures of ₦10,000 each at 10% interest. If the debentures are redeemed at the end of the 5th year, what is the total amount paid to the debenture holders?
A. ₦50,000
B. ₦100,000
C. ₦150,000
Correct D. ₦200,000

Correct Answer: D

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Question 11
A company's depreciation policy is to depreciate its assets by 10% per annum using the straight-line method. If an asset cost ₦100,000 and has a residual value of ₦20,000, what is the annual depreciation charge?
A. ₦8,000
Correct B. ₦10,000
C. ₦12,000
D. ₦14,000

Correct Answer: B

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Question 12
A partnership is formed by three individuals, A, B, and C, who contribute ₦100,000, ₦150,000, and ₦200,000 respectively. The partnership agreement states that the profits will be shared in the ratio 2:3:4. If the partnership earns a profit of ₦500,000, how much will A receive?
Correct A. ₦100,000
B. ₦150,000
C. ₦200,000
D. ₦250,000

Correct Answer: A

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Question 13
A company uses the double-entry system of accounting. The following transactions are recorded in the journal: Debit Cash ₦10,000, Credit Purchases ₦10,000. What is the effect of this transaction on the accounting equation?
A. Increases Assets and Decreases Liabilities
B. Increases Liabilities and Decreases Assets
C. Increases Equity and Decreases Assets
Correct D. Increases Assets and Decreases Equity

Correct Answer: D

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Question 14
A company uses the self-balancing ledger system. The following transactions are recorded: Debit Sales ₦20,000, Credit Sales Returns and Allowances ₦5,000. What is the effect of this transaction on the accounting equation?
Correct A. Increases Revenue and Decreases Expenses
B. Increases Expenses and Decreases Revenue
C. Increases Assets and Decreases Liabilities
D. Increases Liabilities and Decreases Assets

Correct Answer: A

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Question 15
A company uses the control account system. The following transactions are recorded: Debit Purchases ₦50,000, Credit Purchases Returns and Allowances ₦10,000. What is the effect of this transaction on the control account?
Correct A. Increases Purchases and Decreases Purchases Returns and Allowances
B. Increases Purchases Returns and Allowances and Decreases Purchases
C. Increases Assets and Decreases Liabilities
D. Increases Liabilities and Decreases Assets

Correct Answer: A

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Question 16
A company uses the manufacturing account system. The following transactions are recorded: Debit Work-in-Progress ₦30,000, Credit Direct Materials ₦20,000. What is the effect of this transaction on the manufacturing account?
Correct A. Increases Work-in-Progress and Decreases Direct Materials
B. Increases Direct Materials and Decreases Work-in-Progress
C. Increases Assets and Decreases Liabilities
D. Increases Liabilities and Decreases Assets

Correct Answer: A

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Question 17
A company issues 10,000, 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.
Correct A. ₦500,000
B. ₦1,000,000
C. ₦1,500,000
D. ₦2,000,000

Correct Answer: A

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Question 18
A trader purchases goods worth ₦500,000 on credit. He sells the goods for ₦650,000 and incurs a discount of 5% on the sales. Calculate the gross profit made by the trader.
A. ₦75,000
Correct B. ₦85,000
C. ₦95,000
D. ₦105,000

Correct Answer: B

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Question 19
A company's balance sheet shows a current ratio of 2:3. If the company's current assets are ₦1,200,000, calculate the company's current liabilities.
A. ₦1,800,000
Correct B. ₦2,400,000
C. ₦3,000,000
D. ₦3,600,000

Correct Answer: B

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Question 20
A company issues 5,000, 12% preference shares of ₦10 each. Calculate the amount of dividend paid to the preference shareholders.
Correct A. ₦60,000
B. ₦80,000
C. ₦100,000
D. ₦120,000

Correct Answer: A

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Question 21
A company's cash book shows a balance of ₦120,000. The company's bank statement shows a balance of ₦150,000. Calculate the difference between the two balances.
A. ₦30,000
B. ₦40,000
C. ₦50,000
Correct D. ₦60,000

Correct Answer: D

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Question 22
A company uses the weighted average method to value its inventory. The cost of goods available for sale is ₦1,500,000. The beginning inventory is ₦300,000. The purchases during the period are ₦900,000. The total cost of goods available for sale is ₦1,500,000. The company uses a perpetual inventory system. What is the cost of goods sold?
A. ₦900,000
Correct B. ₦1,200,000
C. ₦1,500,000
D. ₦1,800,000

Correct Answer: B

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Question 23
A company has the following ledger accounts: Cash ₦100,000, Accounts Payable ₦50,000, Common Stock ₦200,000, Retained Earnings ₦150,000. What is the total equity of the company?
A. ₦350,000
Correct B. ₦400,000
C. ₦450,000
D. ₦500,000

Correct Answer: B

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Question 24
A company uses the FIFO method to value its inventory. The cost of goods available for sale is ₦1,500,000. The beginning inventory is ₦300,000. The purchases during the period are ₦900,000. The total cost of goods available for sale is ₦1,500,000. The company uses a perpetual inventory system. What is the cost of goods sold?
Correct A. ₦900,000
B. ₦1,200,000
C. ₦1,500,000
D. ₦1,800,000

Correct Answer: A

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Question 25
A company has the following ledger accounts: Cash ₦100,000, Accounts Payable ₦50,000, Common Stock ₦200,000, Retained Earnings ₦150,000. What is the total assets of the company?
A. ₦400,000
B. ₦450,000
C. ₦500,000
Correct D. ₦550,000

Correct Answer: D

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