POST UTME MOUNTAIN TOP UNIVERSITY 2025 Accounting | Objective

Practice these randomly selected questions to test your readiness.

Question 1
A company uses the double-entry system of accounting. On January 1, 2025, it had a cash balance of ₦500,000. During the year, it received ₦750,000 in cash and paid out ₦300,000 in cash. Calculate the net increase in cash for the year.
A. ₦150,000
B. ₦200,000
C. ₦250,000
D. ₦300,000
Question 2
A partnership is formed between two individuals, A and B, with a capital contribution of ₦100,000 and ₦150,000, respectively. During the year, A withdraws ₦20,000, and B invests an additional ₦30,000. Calculate the new capital ratio of A to B.
A. 1:1.5
B. 1:2
C. 1.5:1
D. 2:1
Question 3
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
C. ₦40,000
D. ₦50,000
Question 4
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
A. unrecorded deposits
B. unrecorded withdrawals
C. incorrect bank balance
D. incorrect company balance
Question 5
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
C. incorrect posting of the credit to accounts receivable
D. incorrect posting of the debit to accounts payable
Question 6
A company's Balance Sheet shows a current liability of ₦50,000. What is the effect of this liability on the company's liquidity position?
A. Increases liquidity
B. Decreases liquidity
C. No effect on liquidity
D. Unknown effect on liquidity
Question 7
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
C. ₦520,000
D. ₦530,000
Question 8
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
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
Question 9
A company uses the percentage of completion method to account for construction contracts. At the end of the current year, the company has completed 75% of the contract. The total contract price is ₦1,500,000, and the company has incurred costs of ₦1,125,000. Calculate the profit recognized for the year.
A. ₦562,500
B. ₦625,000
C. ₦687,500
D. ₦750,000
Question 10
A company uses the straight-line method to depreciate its assets. The asset's cost is ₦120,000, and its residual value is ₦20,000. The asset is expected to have a useful life of 5 years. Calculate the annual depreciation charge.
A. ₦20,000
B. ₦22,000
C. ₦24,000
D. ₦26,000
Question 11
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.
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.
Question 12
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
D. ₦25,000
Question 13
A company uses the perpetual inventory system. On January 1, 2025, it had 500 units of a product in stock, costing ₦250 each. During the year, 300 units were sold, and 200 units were purchased at ₦300 each. Calculate the cost of goods sold for the year.
A. ₦75,000
B. ₦80,000
C. ₦85,000
D. ₦90,000
Question 14
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
B. ₦200,000
C. ₦300,000
D. ₦400,000
Question 15
A company's Profit and Loss Account shows a profit of ₦20,000. What is the effect of this profit on the company's retained earnings?
A. Increases retained earnings by ₦20,000
B. Decreases retained earnings by ₦20,000
C. No effect on retained earnings
D. Unknown effect on retained earnings

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