Practice post utme oau accounting 2021 Past Questions

Question 1

In a public sector accounting system, what is the primary purpose of the 'Chart of Accounts'?

A. To provide a detailed description of the organization's financial activities

B. To facilitate the preparation of financial statements

Correct C. To enable the identification of assets, liabilities, and equity

D. To provide a framework for budgeting and financial planning

Correct Answer: C

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Question 2

A company issues 1,000 shares of 10 par value at a premium of 5 per share. What is the total amount received from the sale of these shares?

A. ₦1,000,000

Correct B. ₦1,500,000

C. ₦2,000,000

D. ₦2,500,000

Correct Answer: B

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Question 3

A partnership has two partners, A and B, who share profits and losses in the ratio 3:2. If the total profit for the year is ₦120,000, how much will partner A receive?

Correct A. ₦90,000

B. ₦80,000

C. ₦70,000

D. ₦60,000

Correct Answer: A

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Question 4

A company has the following transactions: Purchased office supplies for ₦10,000, Paid salaries of ₦50,000, and Collected cash from customers of ₦30,000. What is the net effect on the company's cash balance?

A. ₦10,000 increase

Correct B. ₦20,000 increase

C. ₦30,000 decrease

D. ₦40,000 decrease

Correct Answer: B

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Question 5

A company issues 5-year debentures of ₦100,000 each at a discount of 5%. What is the total amount received from the sale of these debentures?

A. ₦4,750,000

Correct B. ₦4,875,000

C. ₦4,900,000

D. ₦4,925,000

Correct Answer: B

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Question 6

A company uses the straight-line method to depreciate its assets. If the asset's cost is ₦120,000 and its useful life is 5 years, what is the annual depreciation charge?

Correct A. ₦24,000

B. ₦20,000

C. ₦25,000

D. ₦30,000

Correct Answer: A

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Question 7

A company's trial balance shows the following accounts: Accounts Payable ₦50,000, Accounts Receivable ₦20,000, and Common Stock ₦100,000. What is the total amount of assets?

A. ₦70,000

B. ₦80,000

C. ₦90,000

Correct D. ₦100,000

Correct Answer: D

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Question 8

A company uses the weighted average method to value its inventory. If the inventory consists of 100 units of item A at ₦10 each and 50 units of item B at ₦20 each, what is the total value of the inventory?

A. ₦1,500

B. ₦1,800

Correct C. ₦2,000

D. ₦2,500

Correct Answer: C

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Question 9

A company's income statement shows the following items: Sales ₦500,000, Cost of Goods Sold ₦300,000, and Net Income ₦150,000. What is the gross profit?

A. ₦200,000

B. ₦250,000

Correct C. ₦300,000

D. ₦350,000

Correct Answer: C

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Question 10

A company's balance sheet shows the following items: Cash ₦50,000, Accounts Payable ₦20,000, and Common Stock ₦100,000. What is the total amount of liabilities?

A. ₦30,000

B. ₦40,000

Correct C. ₦50,000

D. ₦60,000

Correct Answer: C

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Question 11

A company's trial balance shows a debit balance of ₦15,000 in the 'Rent and Rates' account. However, the company's accounting records indicate that the actual rent paid for the year was ₦20,000. What is the correct journal entry to record the adjustment?

Correct A. ₦5,000 debit to 'Rent and Rates' and ₦5,000 credit to 'Profit or Loss'

B. ₦5,000 debit to 'Profit or Loss' and ₦5,000 credit to 'Rent and Rates'

C. ₦20,000 debit to 'Rent and Rates' and ₦20,000 credit to 'Profit or Loss'

D. ₦15,000 debit to 'Rent and Rates' and ₦15,000 credit to 'Profit or Loss'

Correct Answer: A

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Question 12

A company's balance sheet shows a current asset of ₦100,000 in the 'Accounts Receivable' account. However, the company's accounting records indicate that the actual amount of accounts receivable is ₦120,000. What is the correct journal entry to record the adjustment?

Correct A. ₦20,000 debit to 'Accounts Receivable' and ₦20,000 credit to 'Profit or Loss'

B. ₦20,000 debit to 'Profit or Loss' and ₦20,000 credit to 'Accounts Receivable'

C. ₦100,000 debit to 'Accounts Receivable' and ₦100,000 credit to 'Profit or Loss'

D. ₦120,000 debit to 'Accounts Receivable' and ₦120,000 credit to 'Profit or Loss'

Correct Answer: A

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Question 13

A company's trial balance shows a credit balance of ₦10,000 in the 'Salaries and Wages' account. However, the company's accounting records indicate that the actual salaries and wages paid for the year was ₦15,000. What is the correct journal entry to record the adjustment?

Correct A. ₦5,000 debit to 'Salaries and Wages' and ₦5,000 credit to 'Profit or Loss'

B. ₦5,000 debit to 'Profit or Loss' and ₦5,000 credit to 'Salaries and Wages'

C. ₦10,000 debit to 'Salaries and Wages' and ₦10,000 credit to 'Profit or Loss'

D. ₦15,000 debit to 'Salaries and Wages' and ₦15,000 credit to 'Profit or Loss'

Correct Answer: A

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Question 14

A company's balance sheet shows a non-current liability of ₦50,000 in the 'Borrowings' account. However, the company's accounting records indicate that the actual amount of borrowings is ₦60,000. What is the correct journal entry to record the adjustment?

Correct A. ₦10,000 debit to 'Borrowings' and ₦10,000 credit to 'Profit or Loss'

B. ₦10,000 debit to 'Profit or Loss' and ₦10,000 credit to 'Borrowings'

C. ₦50,000 debit to 'Borrowings' and ₦50,000 credit to 'Profit or Loss'

D. ₦60,000 debit to 'Borrowings' and ₦60,000 credit to 'Profit or Loss'

Correct Answer: A

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Question 15

A company's trial balance shows a debit balance of ₦20,000 in the 'Depreciation' account. However, the company's accounting records indicate that the actual depreciation for the year was ₦25,000. What is the correct journal entry to record the adjustment?

Correct A. ₦5,000 debit to 'Depreciation' and ₦5,000 credit to 'Profit or Loss'

B. ₦5,000 debit to 'Profit or Loss' and ₦5,000 credit to 'Depreciation'

C. ₦20,000 debit to 'Depreciation' and ₦20,000 credit to 'Profit or Loss'

D. ₦25,000 debit to 'Depreciation' and ₦25,000 credit to 'Profit or Loss'

Correct Answer: A

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Question 16

A company issued 5,000 shares of 10 par value at a premium of 5 per share. The shares were sold for 15 each. Prepare the journal entry to record the issuance of these shares.

A. Debit Cash 75,000; Credit Common Stock 50,000; Credit Paid-in Capital in Excess of Par Value 25,000

B. Debit Common Stock 50,000; Credit Paid-in Capital in Excess of Par Value 25,000; Credit Cash 75,000

C. Debit Paid-in Capital in Excess of Par Value 25,000; Credit Common Stock 50,000; Credit Cash 75,000

Correct D. Debit Cash 75,000; Credit Common Stock 50,000; Credit Paid-in Capital in Excess of Par Value 25,000

Correct Answer: D

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Question 17

A company has the following trial balance as of December 31, 2022: Debit 100,000; Credit 150,000. What is the correct balance in the general ledger?

Correct A. 50,000

B. 75,000

C. 100,000

D. 150,000

Correct Answer: A

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Question 18

A company has the following ledger accounts: Cash 10,000; Accounts Payable 5,000; Common Stock 20,000. What is the total amount of equity?

A. 25,000

Correct B. 30,000

C. 35,000

D. 40,000

Correct Answer: B

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Question 19

A company issued 1,000 shares of 10 par value at a premium of 5 per share. The shares were sold for 15 each. Prepare the journal entry to record the issuance of these shares.

A. Debit Cash 15,000; Credit Common Stock 10,000; Credit Paid-in Capital in Excess of Par Value 5,000

B. Debit Common Stock 10,000; Credit Paid-in Capital in Excess of Par Value 5,000; Credit Cash 15,000

C. Debit Paid-in Capital in Excess of Par Value 5,000; Credit Common Stock 10,000; Credit Cash 15,000

Correct D. Debit Cash 15,000; Credit Common Stock 10,000; Credit Paid-in Capital in Excess of Par Value 5,000

Correct Answer: D

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Question 20

A company has the following trial balance as of December 31, 2022: Debit 100,000; Credit 150,000. What is the correct balance in the general ledger?

Correct A. 50,000

B. 75,000

C. 100,000

D. 150,000

Correct Answer: A

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Question 21

A company's trial balance shows an error of ₦15,000 in the debit side of the account 'Office Equipment'. If the correct balance is ₦45,000, what is the correct balance in the credit side of the account 'Office Equipment'?

Correct A. ₦60,000

B. ₦45,000

C. ₦30,000

D. ₦60,000

Correct Answer: A

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Question 22

A manufacturing company uses the process costing method. The following data are given: Opening work-in-progress (WIP) inventory: ₦150,000; Direct materials: ₦300,000; Direct labor: ₦250,000; Factory overhead: ₦200,000. Calculate the total cost of production.

A. ₦900,000

B. ₦1,000,000

Correct C. ₦1,050,000

D. ₦1,100,000

Correct Answer: C

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Question 23

A company's balance sheet shows an increase in its current assets of ₦500,000 and a decrease in its current liabilities of ₦200,000. What is the net increase in the company's working capital?

A. ₦300,000

B. ₦400,000

Correct C. ₦500,000

D. ₦600,000

Correct Answer: C

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Question 24

A company uses the straight-line method of depreciation. The cost of a machine is ₦500,000 and its residual value is ₦50,000. If the machine is depreciated over a period of 5 years, what is the annual depreciation charge?

A. ₦90,000

B. ₦95,000

Correct C. ₦100,000

D. ₦105,000

Correct Answer: C

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Question 25

A company's trial balance shows an error of ₦20,000 in the credit side of the account 'Salaries and Wages'. If the correct balance is ₦120,000, what is the correct balance in the debit side of the account 'Salaries and Wages'?

Correct A. ₦100,000

B. ₦120,000

C. ₦140,000

D. ₦160,000

Correct Answer: A

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