Practice post utme nile university accounting 2019 Past Questions

Question 1

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

A. ₦3,500,000

Correct B. ₦4,700,000

C. ₦5,300,000

D. ₦6,100,000

Correct Answer: B

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Question 2

A company uses the double-entry system of accounting. The company's trial balance shows the following accounts: Cash ₦1,000,000, Accounts Payable ₦500,000, Common Stock ₦2,000,000, and Retained Earnings ₦1,500,000. What is the total equity of the company?

A. ₦3,500,000

B. ₦4,000,000

Correct C. ₦4,500,000

D. ₦5,000,000

Correct Answer: C

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Question 3

A company has the following transactions: Purchased office supplies for ₦10,000, Sold goods for ₦50,000, and Paid rent for ₦20,000. What is the total amount of cash outflows for the company?

A. ₦30,000

Correct B. ₦40,000

C. ₦50,000

D. ₦60,000

Correct Answer: B

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Question 4

A company has the following ledger accounts: Cash ₦1,000,000, Accounts Payable ₦500,000, Common Stock ₦2,000,000, and Retained Earnings ₦1,500,000. What is the total amount of assets for the company?

Correct A. ₦3,500,000

B. ₦4,000,000

C. ₦4,500,000

D. ₦5,000,000

Correct Answer: A

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Question 5

A company has the following transactions: Purchased office supplies for ₦10,000, Sold goods for ₦50,000, and Paid rent for ₦20,000. What is the total amount of cash inflows for the company?

A. ₦20,000

B. ₦30,000

Correct C. ₦40,000

D. ₦50,000

Correct Answer: C

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Question 6

A company's trial balance shows a debit balance of ₦12,000 in the 'Rent Expense' account. However, the company's accounting records indicate that it has paid ₦15,000 in rent for the year. What is the correct journal entry to record the payment?

A. Debit Rent Expense ₦3,000, Credit Cash ₦3,000

Correct B. Debit Rent Expense ₦12,000, Credit Cash ₦15,000

C. Debit Rent Expense ₦15,000, Credit Cash ₦12,000

D. Debit Rent Expense ₦3,000, Credit Cash ₦12,000

Correct Answer: B

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Question 7

A partnership has two partners, A and B. The capital accounts of A and B are ₦50,000 and ₦30,000 respectively. The profit-sharing ratio is 3:2. What is the total profit-sharing ratio of the partnership?

Correct A. 3:2

B. 5:3

C. 3:5

D. 2:3

Correct Answer: A

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Question 8

A company has the following transactions: Purchased goods for ₦20,000 on credit, Sold goods for ₦30,000 on credit, and Paid cash of ₦10,000 to a creditor. What is the total amount of cash paid to creditors?

Correct A. ₦10,000

B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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Question 9

A company has the following trial balance: Debit: ₦50,000, Credit: ₦60,000. What is the correct balance sheet equation?

Correct A. Assets = Liabilities + Capital

B. Assets = Liabilities - Capital

C. Assets - Liabilities = Capital

D. Assets + Liabilities = Capital

Correct Answer: A

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Question 10

A company has the following transactions: Purchased goods for ₦20,000 on credit, Sold goods for ₦30,000 on credit, and Paid cash of ₦10,000 to a creditor. What is the total amount of cash paid to creditors?

Correct A. ₦10,000

B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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Question 11

A company's financial statements are prepared in accordance with the accrual accounting method. Which of the following accounts would be affected by the accrual accounting method?

A. Accounts Payable

Correct B. Accounts Receivable

C. Salaries Payable

D. Wages Payable

Correct Answer: B

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Question 12

A public sector organization has the following transactions: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash received from sale of goods | 10,000 | | | 2 Jan | Purchase of office supplies | | 2,000 | | 3 Jan | Cash paid to employees | | 8,000 | What is the total amount of cash received from the sale of goods?

A. ₦8,000

Correct B. ₦10,000

C. ₦12,000

D. ₦14,000

Correct Answer: B

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Question 13

A company has the following journal entries: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Purchase of equipment | 10,000 | | | 2 Jan | Purchase of office supplies | | 2,000 | | 3 Jan | Cash paid to employees | | 8,000 | What is the total amount of cash paid to employees?

Correct A. ₦8,000

B. ₦10,000

C. ₦12,000

D. ₦14,000

Correct Answer: A

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Question 14

A company has the following cash book: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash received from sale of goods | 10,000 | | | 2 Jan | Purchase of office supplies | | 2,000 | | 3 Jan | Cash paid to employees | | 8,000 | What is the total amount of cash paid to employees?

Correct A. ₦8,000

B. ₦10,000

C. ₦12,000

D. ₦14,000

Correct Answer: A

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Question 15

A company has the following bank reconciliation statement: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 Jan | Cash received from sale of goods | 10,000 | | | 2 Jan | Purchase of office supplies | | 2,000 | | 3 Jan | Cash paid to employees | | 8,000 | What is the total amount of cash paid to employees?

Correct A. ₦8,000

B. ₦10,000

C. ₦12,000

D. ₦14,000

Correct Answer: A

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Question 16

In a partnership account, the capital of one partner is withdrawn and the remaining partners' capitals are adjusted proportionally. What is the effect on the partners' capitals?

A. The capitals of the remaining partners increase proportionally.

B. The capitals of the remaining partners decrease proportionally.

C. The capitals of the remaining partners remain unchanged.

Correct D. The capitals of the remaining partners are adjusted proportionally.

Correct Answer: D

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Question 17

A company uses the straight-line method of depreciation. If the asset's useful life is 5 years and its residual value is ₦50,000, what is the annual depreciation charge if the asset's cost is ₦250,000?

A. ₦40,000

Correct B. ₦45,000

C. ₦50,000

D. ₦55,000

Correct Answer: B

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Question 18

A company's cash book shows a balance of ₦120,000. However, the bank statement shows a balance of ₦150,000. What is the reason for the difference?

A. The company has made a mistake in recording the cash transactions.

B. The bank has made a mistake in recording the cash transactions.

C. The company has deposited cash into the bank but has not recorded it.

Correct D. The company has withdrawn cash from the bank but has not recorded it.

Correct Answer: D

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Question 19

A company's control account shows a balance of ₦200,000. However, the ledger account shows a balance of ₦250,000. What is the reason for the difference?

A. The company has made a mistake in recording the transactions.

B. The ledger account has been incorrectly balanced.

C. The control account has been incorrectly balanced.

Correct D. The company has made a mistake in preparing the trial balance.

Correct Answer: D

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Question 20

A company uses the self-balancing ledger system. What is the advantage of this system?

Correct A. It reduces the risk of errors in recording transactions.

B. It increases the risk of errors in recording transactions.

C. It reduces the time taken to prepare the trial balance.

D. It increases the time taken to prepare the trial balance.

Correct Answer: A

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Question 21

A company issued 5,000, 10% debentures of ₦100 each. Calculate the total amount of interest payable annually.

Correct A. ₦50,000

B. ₦25,000

C. ₦12,500

D. ₦62,500

Correct Answer: A

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Question 22

A company's trading account for the year ended 31st December 2022 is as follows: Debit: Sales: ₦1,500,000 Purchases: ₦1,200,000 Wages: ₦150,000 Rent: ₦50,000 Credit: Returns Outwards: ₦20,000 Returns Inwards: ₦30,000 Calculate the gross profit for the year.

Correct A. ₦250,000

B. ₦300,000

C. ₦350,000

D. ₦400,000

Correct Answer: A

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Question 23

A company's balance sheet as at 31st December 2022 is as follows: Assets: ₦1,500,000 Liabilities: ₦1,000,000 Capital: ₦500,000 What is the company's liquidity ratio?

A. 1:1

Correct B. 2:1

C. 3:1

D. 4:1

Correct Answer: B

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Question 24

A company issued 10,000, 5% shares of ₦10 each. Calculate the total amount of dividend payable annually.

Correct A. ₦50,000

B. ₦25,000

C. ₦12,500

D. ₦62,500

Correct Answer: A

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Question 25

A company's profit and loss account for the year ended 31st December 2022 is as follows: Trading Profit: ₦500,000 Interest: ₦100,000 Dividend: ₦50,000 Total Profit: ₦650,000 What is the company's net profit?

Correct A. ₦650,000

B. ₦700,000

C. ₦750,000

D. ₦800,000

Correct Answer: A

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