POST UTME MOUNTAIN TOP UNIVERSITY 2025 Accounting | Objective

Are you preparing for POST UTME MOUNTAIN TOP UNIVERSITY exams? Reviewing past questions is one of the most effective ways to guarantee a high score. This practice hub features authentic 2025 Accounting (Objective) questions designed to simulate the real exam environment.

Practice these randomly selected questions to test your readiness.

Question 1
In a partnership account, what is the correct method of calculating the capital of a partner who has been absent for the past three years?
A. Capital is calculated based on the partner's last known balance.
Correct B. Capital is calculated based on the partner's average balance over the past three years.
C. Capital is calculated based on the partner's current balance.
D. Capital is calculated based on the partner's initial investment.

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 2
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 eliminate this discrepancy?
A. Debit Rent Paid ₦5,000, Credit Rent Received ₦5,000
Correct B. Debit Rent Received ₦5,000, Credit Rent Paid ₦5,000
C. Debit Rent Received ₦20,000, Credit Rent Paid ₦15,000
D. Debit Rent Paid ₦20,000, Credit Rent Received ₦15,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 3
A company's balance sheet shows a current ratio of 2:1. If the company's current assets are ₦100,000 and its current liabilities are ₦50,000, what is the correct interpretation of this ratio?
Correct A. The company has sufficient liquidity to meet its short-term obligations.
B. The company has insufficient liquidity to meet its short-term obligations.
C. The company has a moderate level of liquidity.
D. The company has a high level of liquidity.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 4
A company's profit and loss account shows a net profit of ₦50,000. If the company's turnover is ₦200,000 and its gross profit is ₦100,000, what is the correct calculation of the company's net profit margin?
A. 25%
Correct B. 30%
C. 35%
D. 40%

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 5
A company's balance sheet shows a total assets of ₦500,000 and a total equity of ₦300,000. What is the correct interpretation of the company's gearing ratio?
A. The company has a high level of gearing.
B. The company has a moderate level of gearing.
Correct C. The company has a low level of gearing.
D. The company has no gearing.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 6
A company uses the double-entry system to record its transactions. If the company purchases office equipment for ₦50,000, what is the effect on the accounting equation?
A. Assets increase, Liabilities increase
Correct B. Assets increase, Liabilities decrease
C. Assets decrease, Liabilities increase
D. Assets decrease, Liabilities decrease

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 7
A manufacturing company produces 1000 units of a product. The cost of raw materials is ₦50 per unit, and the labor cost is ₦30 per unit. If the selling price is ₦120 per unit, what is the gross profit?
A. ₦20,000
B. ₦30,000
Correct C. ₦40,000
D. ₦50,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 8
A public sector organization has a budget of ₦1,000,000 for a project. If the actual expenditure is ₦800,000, what is the variance?
A. ₦100,000
Correct B. ₦200,000
C. ₦300,000
D. ₦400,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 9
A company has the following trial balance: Debitors ₦100,000, Creditors ₦50,000. What is the net current asset?
A. ₦50,000
Correct B. ₦75,000
C. ₦100,000
D. ₦125,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 10
A company discovers an error in its accounting records. The error is a mistake in the calculation of the cost of goods sold. The correct cost of goods sold is ₦200,000. What is the effect on the net profit?
A. ₦20,000
B. ₦30,000
Correct C. ₦40,000
D. ₦50,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 11
A company issued 5,000, 10% debentures of ₦100 each at a discount of 5%. Calculate the amount received from the debenture holders.
A. ₦475,000
Correct B. ₦480,000
C. ₦485,000
D. ₦490,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 12
A firm's trial balance as at 31st December, 2024, showed the following balances: Accounts Payable ₦120,000, Sales Revenue ₦500,000, Cost of Goods Sold ₦300,000, and Dividends ₦20,000. Prepare the firm's income statement for the year.
A. ₦220,000
B. ₦230,000
Correct C. ₦240,000
D. ₦250,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 13
A company's cash book showed the following transactions: Cash received from customers ₦150,000, Cash paid to suppliers ₦80,000, Cash paid to employees ₦30,000, and Cash received from bank ₦20,000. Prepare the company's cash book.
A. ₦140,000
B. ₦145,000
Correct C. ₦150,000
D. ₦155,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 14
A company issued 10,000, 5% preference shares of ₦50 each at a premium of ₦10 per share. Calculate the amount received from the shareholders.
A. ₦500,000
B. ₦510,000
Correct C. ₦520,000
D. ₦530,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 15
A company's bank reconciliation statement showed the following differences: Bank balance ₦100,000, Cash in hand ₦20,000, Outstanding cheques ₦30,000, and Deposits in transit ₦40,000. Prepare the company's bank reconciliation statement.
A. ₦130,000
B. ₦140,000
Correct C. ₦150,000
D. ₦160,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 16
A company issued 10,000 shares of ₦1 each at a premium of ₦0.50 per share. The shares were issued for ₦1,000,000. Prepare the journal entry for the issue of shares.
Correct A. Debit Share Capital ₦1,000,000, Credit Cash ₦1,000,000
B. Debit Share Capital ₦1,000,000, Credit Cash ₦0,500,000
C. Debit Share Capital ₦0,500,000, Credit Cash ₦1,000,000
D. Debit Share Capital ₦0,500,000, Credit Cash ₦0,500,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 17
A company's trial balance showed the following balances: Accounts Payable ₦1,000,000, Sales Revenue ₦1,000,000. The company's accountant discovered that the Sales Revenue account was overstated by ₦0,500,000. Prepare the necessary journal entry to correct the error.
A. Debit Sales Revenue ₦0,500,000, Credit Accounts Payable ₦0,500,000
B. Debit Sales Revenue ₦0,500,000, Credit Cash ₦0,500,000
Correct C. Debit Accounts Payable ₦0,500,000, Credit Sales Revenue ₦0,500,000
D. Debit Sales Revenue ₦0,500,000, Credit Retained Earnings ₦0,500,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 18
A company issued 10,000 shares of ₦1 each at a premium of ₦0.50 per share. The shares were issued for ₦1,000,000. Prepare the ledger accounts for the issue of shares.
Correct A. Debit Share Capital ₦1,000,000, Credit Cash ₦1,000,000
B. Debit Share Capital ₦1,000,000, Credit Cash ₦0,500,000
C. Debit Share Capital ₦0,500,000, Credit Cash ₦1,000,000
D. Debit Share Capital ₦0,500,000, Credit Cash ₦0,500,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 19
A company's trial balance showed the following balances: Accounts Payable ₦1,000,000, Sales Revenue ₦1,000,000. The company's accountant discovered that the Sales Revenue account was overstated by ₦0,500,000. Prepare the necessary ledger accounts to correct the error.
A. Debit Sales Revenue ₦0,500,000, Credit Accounts Payable ₦0,500,000
B. Debit Sales Revenue ₦0,500,000, Credit Cash ₦0,500,000
Correct C. Debit Accounts Payable ₦0,500,000, Credit Sales Revenue ₦0,500,000
D. Debit Sales Revenue ₦0,500,000, Credit Retained Earnings ₦0,500,000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 20
A company issued 10,000 shares of ₦1 each at a premium of ₦0.50 per share. The shares were issued for ₦1,000,000. Prepare the journal entry for the issue of shares, assuming the company uses the cost method of accounting.
Correct A. Debit Share Capital ₦1,000,000, Credit Cash ₦1,000,000
B. Debit Share Capital ₦1,000,000, Credit Cash ₦0,500,000
C. Debit Share Capital ₦0,500,000, Credit Cash ₦1,000,000
D. Debit Share Capital ₦0,500,000, Credit Cash ₦0,500,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 21
A company's trial balance shows a discrepancy of ₦5,000. The accountant suspects an error in the posting of a transaction. The transaction involved the sale of goods for ₦20,000, with a cash receipt of ₦15,000 and a credit to accounts receivable for ₦5,000. The error is most likely due to the
A. incorrect posting of the sale of goods
B. incorrect posting of the cash receipt
Correct C. incorrect posting of the credit to accounts receivable
D. incorrect posting of the debit to accounts payable

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 22
A company's bank reconciliation statement shows a difference of ₦10,000 between the bank's balance and the company's balance. The company's balance is ₦50,000, and the bank's balance is ₦40,000. The difference is most likely due to
Correct A. unrecorded deposits
B. unrecorded withdrawals
C. incorrect bank balance
D. incorrect company balance

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 23
A company's assets include a building with a carrying value of ₦1,000,000 and a useful life of 10 years. The company uses the straight-line method of depreciation. The annual depreciation charge is
Correct A. ₦100,000
B. ₦200,000
C. ₦500,000
D. ₦1,000,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 24
A company issues 1,000 shares of ₦10 each at a premium of ₦5 per share. The total amount received from the issue of shares is
A. ₦10,000
B. ₦15,000
C. ₦20,000
Correct D. ₦25,000

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics
Question 25
Two partners, A and B, share profits and losses in the ratio 3:2. The capital of A is ₦60,000, and the capital of B is ₦40,000. The total profit for the year is ₦100,000. The share of profit of A is
A. ₦60,000
Correct B. ₦50,000
C. ₦40,000
D. ₦30,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Help others prepare! Share this practice hub:
Chat with Support