Practice post utme oau accounting 2024 Past Questions

Question 1

A company uses the percentage of completion method to account for construction contracts. At the end of the year, the company has incurred costs of ₦1,500,000 and earned revenue of ₦1,800,000. The contract is 75% complete. Calculate the profit or loss for the year.

A. ₦150,000

Correct B. ₦200,000

C. ₦250,000

D. ₦300,000

Correct Answer: B

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Question 2

A partnership has two partners, A and B. The capital accounts of A and B at the beginning of the year are ₦500,000 and ₦300,000, respectively. During the year, A withdraws ₦100,000 and B withdraws ₦50,000. The profit for the year is ₦150,000. Prepare the partnership's statement of changes in equity.

A. ₦650,000

B. ₦700,000

Correct C. ₦750,000

D. ₦800,000

Correct Answer: C

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Question 3

A company purchases a machine for ₦1,200,000. The machine has a useful life of 5 years and a residual value of ₦100,000. Calculate the annual depreciation using the straight-line method.

A. ₦200,000

B. ₦220,000

Correct C. ₦240,000

D. ₦260,000

Correct Answer: C

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Question 4

A company has the following transactions related to its manufacturing department: Beginning work-in-progress (WIP) inventory: ₦150,000 Production costs incurred during the year: ₦500,000 Ending WIP inventory: ₦200,000 Calculate the cost of goods manufactured.

A. ₦600,000

B. ₦650,000

Correct C. ₦700,000

D. ₦750,000

Correct Answer: C

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Question 5

A company has the following balance sheet as at December 31, 2023: Assets: ₦1,500,000 (current assets) ₦800,000 (non-current assets) Liabilities: ₦600,000 (current liabilities) ₦400,000 (non-current liabilities) Equity: ₦500,000 (share capital) ₦200,000 (retained earnings) Calculate the current ratio.

A. 2:1

Correct B. 2.5:1

C. 3:1

D. 3.5:1

Correct Answer: B

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Question 6

In a public sector organization, the accounting system is designed to provide information for decision-making purposes. Which of the following is a characteristic of a public sector accounting system?

A. It is designed to provide information for internal management purposes only.

Correct B. It is designed to provide information for both internal management and external stakeholders.

C. It is designed to provide information for external stakeholders only.

D. It is designed to provide information for internal management purposes only, but with limited disclosure to external stakeholders.

Correct Answer: B

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Question 7

A company uses the perpetual inventory system. On January 1, it had 100 units of inventory with a cost of ₦100 each. On January 15, it purchased 50 units at ₦120 each. On January 20, it sold 30 units at ₦150 each. What is the total cost of goods sold for the period?

A. ₦6,500

B. ₦7,500

Correct C. ₦8,500

D. ₦9,500

Correct Answer: C

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Question 8

A company uses the FIFO method of inventory valuation. On January 1, it had 100 units of inventory with a cost of ₦100 each. On January 15, it purchased 50 units at ₦120 each. On January 20, it sold 30 units at ₦150 each. What is the cost of the units sold?

A. ₦3,000

B. ₦4,000

Correct C. ₦5,000

D. ₦6,000

Correct Answer: C

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Question 9

A company uses the LIFO method of inventory valuation. On January 1, it had 100 units of inventory with a cost of ₦100 each. On January 15, it purchased 50 units at ₦120 each. On January 20, it sold 30 units at ₦150 each. What is the cost of the units sold?

A. ₦3,000

B. ₦4,000

C. ₦5,000

Correct D. ₦6,000

Correct Answer: D

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Question 10

A company uses the weighted average method of inventory valuation. On January 1, it had 100 units of inventory with a cost of ₦100 each. On January 15, it purchased 50 units at ₦120 each. On January 20, it sold 30 units at ₦150 each. What is the cost of the units sold?

A. ₦3,500

B. ₦4,500

C. ₦5,500

Correct D. ₦6,500

Correct Answer: D

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Question 11

A company uses the single-entry system of accounting. The following transactions were recorded during the year:

Correct A. ₦10,000

B. ₦20,000

C. ₦30,000

D. ₦40,000

Correct Answer: A

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Question 12

The following is a trial balance for XYZ Ltd. at December 31, 2023.

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

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Question 13

A company has the following ledger accounts:

A. ₦50,000

B. ₦60,000

Correct C. ₦70,000

D. ₦80,000

Correct Answer: C

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Question 14

A company has the following ledger accounts:

A. ₦100,000

Correct B. ₦200,000

C. ₦300,000

D. ₦400,000

Correct Answer: B

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Question 15

A company has the following ledger accounts:

A. ₦50,000

B. ₦60,000

Correct C. ₦70,000

D. ₦80,000

Correct Answer: C

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Question 16

A company's cash book shows a balance of ₦150,000, but the bank statement shows a balance of ₦120,000. The bank reconciliation statement shows a difference of ₦30,000 due to outstanding checks. What is the correct balance in the cash book?

Correct A. ₦180,000

B. ₦150,000

C. ₦120,000

D. ₦90,000

Correct Answer: A

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Question 17

A single entry system is used by a small business. The journal entries are as follows: Debit Cash ₦10,000, Credit Accounts Payable ₦10,000. What is the effect of this entry on the accounting equation?

A. Increases Assets, Decreases Liabilities

B. Decreases Assets, Increases Liabilities

C. Increases Liabilities, Decreases Assets

Correct D. No effect on the accounting equation

Correct Answer: D

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Question 18

A company has the following ledger balances: Cash ₦100,000, Accounts Payable ₦50,000. The company purchases office supplies for ₦20,000 cash. What is the effect of this transaction on the accounting equation?

Correct A. Increases Assets, Decreases Liabilities

B. Decreases Assets, Increases Liabilities

C. Increases Liabilities, Decreases Assets

D. No effect on the accounting equation

Correct Answer: A

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Question 19

A partnership has two partners, A and B. The partnership agreement states that A receives 60% of the profits and B receives 40%. If the partnership makes a profit of ₦120,000, how much will A receive?

Correct A. ₦72,000

B. ₦48,000

C. ₦60,000

D. ₦80,000

Correct Answer: A

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Question 20

A company has the following ledger balances: Cash ₦150,000, Accounts Payable ₦80,000. The company purchases office supplies for ₦30,000 cash. What is the effect of this transaction on the accounting equation?

Correct A. Increases Assets, Decreases Liabilities

B. Decreases Assets, Increases Liabilities

C. Increases Liabilities, Decreases Assets

D. No effect on the accounting equation

Correct Answer: A

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Question 21

A company uses the single-entry system of accounting. The company's trial balance shows the following balances: Cash ¦ 5,000, Accounts Payable ¦ 8,000, Common Stock ¦ 20,000, and Retained Earnings ¦ 15,000. If the company's net income for the year is ¦ 12,000, what is the correct journal entry to record the net income?

A. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

B. Debit Retained Earnings ¦ 12,000, Credit Common Stock ¦ 12,000

C. Debit Accounts Payable ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct D. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct Answer: D

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Question 22

A public sector entity has the following transactions: ¦ 10,000 cash received from customers, ¦ 5,000 cash paid to suppliers, and ¦ 3,000 cash paid to employees. What is the correct journal entry to record these transactions?

A. Debit Cash ¦ 10,000, Credit Accounts Receivable ¦ 10,000

B. Debit Cash ¦ 10,000, Credit Accounts Payable ¦ 5,000

C. Debit Cash ¦ 10,000, Credit Cash ¦ 5,000

Correct D. Debit Cash ¦ 10,000, Credit Cash ¦ 3,000

Correct Answer: D

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Question 23

A company uses the double-entry system of accounting. The company's trial balance shows the following balances: Cash ¦ 5,000, Accounts Payable ¦ 8,000, Common Stock ¦ 20,000, and Retained Earnings ¦ 15,000. If the company's net income for the year is ¦ 12,000, what is the correct journal entry to record the net income?

A. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

B. Debit Retained Earnings ¦ 12,000, Credit Common Stock ¦ 12,000

C. Debit Accounts Payable ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct D. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct Answer: D

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Question 24

A company uses the double-entry system of accounting. The company's trial balance shows the following balances: Cash ¦ 5,000, Accounts Payable ¦ 8,000, Common Stock ¦ 20,000, and Retained Earnings ¦ 15,000. If the company's net income for the year is ¦ 12,000, what is the correct journal entry to record the net income?

A. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

B. Debit Retained Earnings ¦ 12,000, Credit Common Stock ¦ 12,000

C. Debit Accounts Payable ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct D. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct Answer: D

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Question 25

A company uses the double-entry system of accounting. The company's trial balance shows the following balances: Cash ¦ 5,000, Accounts Payable ¦ 8,000, Common Stock ¦ 20,000, and Retained Earnings ¦ 15,000. If the company's net income for the year is ¦ 12,000, what is the correct journal entry to record the net income?

A. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

B. Debit Retained Earnings ¦ 12,000, Credit Common Stock ¦ 12,000

C. Debit Accounts Payable ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct D. Debit Cash ¦ 12,000, Credit Retained Earnings ¦ 12,000

Correct Answer: D

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