Practice post utme pan-atlantic university accounting 2018 Past Questions

Question 1

In a partnership account, the capital of a partner who withdraws cash from the business is reduced by the amount withdrawn. However, if the partner's capital is reduced below the minimum capital required by the partnership agreement, the deficiency is treated as a loan from the partner to the business. What is the correct treatment of the partner's capital when the partner withdraws cash from the business?

A. The partner's capital is reduced by the amount withdrawn.

B. The partner's capital is not reduced by the amount withdrawn.

Correct C. The partner's capital is reduced by the amount withdrawn, but the deficiency is treated as a loan from the partner to the business.

D. The partner's capital is not affected by the withdrawal.

Correct Answer: C

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Question 2

A company uses the straight-line method of depreciation for its assets. If the asset's useful life is 5 years and the 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 3

A government agency prepares its financial statements in accordance with the accrual basis of accounting. If the agency receives ₦100,000 in cash from a customer for services rendered, but the customer has not yet paid for the services, what is the correct treatment of the cash received?

A. The cash received is recorded as revenue.

B. The cash received is recorded as a liability.

Correct C. The cash received is recorded as an asset.

D. The cash received is recorded as an expense.

Correct Answer: C

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Question 4

A company's financial statements are prepared in accordance with the cash basis of accounting. If the company pays ₦50,000 in cash for a new asset, but the asset is not yet used in the business, what is the correct treatment of the cash paid?

A. The cash paid is recorded as an asset.

Correct B. The cash paid is recorded as an expense.

C. The cash paid is recorded as a liability.

D. The cash paid is recorded as revenue.

Correct Answer: B

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Question 5

A company's financial statements are prepared in accordance with the accrual basis of accounting. If the company receives ₦200,000 in cash from a customer for services rendered, but the customer has not yet paid for the services, what is the correct treatment of the cash received?

Correct A. The cash received is recorded as revenue.

B. The cash received is recorded as a liability.

C. The cash received is recorded as an asset.

D. The cash received is recorded as an expense.

Correct Answer: A

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Question 6

A company produces two products, X and Y, using two machines, A and B. The production process for X requires 2 hours on machine A and 3 hours on machine B, while the production process for Y requires 3 hours on machine A and 2 hours on machine B. If machine A operates for 24 hours and machine B operates for 18 hours, what is the total number of units of product X produced?

A. 48

B. 60

Correct C. 72

D. 80

Correct Answer: C

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Question 7

A company's trial balance shows the following balances: Accounts Receivable, ₦120,000; Accounts Payable, ₦90,000; Common Stock, ₦500,000; and Retained Earnings, ₦200,000. What is the total amount of assets?

A. ₦720,000

Correct B. ₦820,000

C. ₦920,000

D. ₦1,020,000

Correct Answer: B

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Question 8

A company's income statement for the year ended December 31, 2022, shows the following: Sales, ₦1,500,000; Cost of Goods Sold, ₦900,000; Gross Profit, ₦600,000; Operating Expenses, ₦300,000; and Net Income, ₦300,000. What is the company's gross margin percentage?

A. 40%

B. 50%

Correct C. 60%

D. 70%

Correct Answer: C

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Question 9

A company's balance sheet as of December 31, 2022, shows the following: Cash, ₦200,000; Accounts Receivable, ₦150,000; Inventory, ₦300,000; Total Assets, ₦750,000; and Total Liabilities, ₦300,000. What is the company's equity?

A. ₦450,000

B. ₦550,000

C. ₦650,000

Correct D. ₦750,000

Correct Answer: D

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Question 10

A company's trial balance shows the following balances: Accounts Receivable, ₦120,000; Accounts Payable, ₦90,000; Common Stock, ₦500,000; and Retained Earnings, ₦200,000. What is the total amount of liabilities?

A. ₦220,000

Correct B. ₦320,000

C. ₦420,000

D. ₦520,000

Correct Answer: B

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Question 11

A company uses the straight-line method to depreciate its assets. If the asset's useful life is 5 years and its residual value is ₦0, what is the annual depreciation charge if the asset's cost is ₦120,000?

Correct A. ₦24,000

B. ₦20,000

C. ₦30,000

D. ₦25,000

Correct Answer: A

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Question 12

A company's cash book shows a balance of ₦50,000. The bank statement shows a balance of ₦60,000. The difference is due to a bank error. What is the amount of the bank error?

Correct A. ₦10,000

B. ₦5,000

C. ₦15,000

D. ₦20,000

Correct Answer: A

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Question 13

A partnership has two partners, A and B. Partner A has a 60% interest in the partnership, and Partner B has a 40% interest. If the partnership's profit is ₦120,000, how much will Partner A receive?

Correct A. ₦72,000

B. ₦48,000

C. ₦60,000

D. ₦80,000

Correct Answer: A

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Question 14

A company's trial balance shows the following balances: Accounts Payable ₦50,000, Accounts Receivable ₦30,000, and Common Stock ₦100,000. What is the total amount of the company's assets?

Correct A. ₦180,000

B. ₦150,000

C. ₦120,000

D. ₦180,000

Correct Answer: A

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Question 15

A company's cash book shows the following transactions: Cash Sale ₦10,000, Cash Purchase ₦5,000, and Bank Deposit ₦20,000. What is the total amount of the company's cash balance?

Correct A. ₦25,000

B. ₦30,000

C. ₦20,000

D. ₦15,000

Correct Answer: A

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Question 16

A company has two departments, A and B, with the following balances in their respective cash books: Department A: ₦1,500, ₦2,000, ₦3,000; Department B: ₦4,000, ₦5,000, ₦6,000. What is the total cash balance of the company?

A. ₦12,000

Correct B. ₦15,000

C. ₦18,000

D. ₦20,000

Correct Answer: B

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Question 17

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

Correct A. ₦60,000

B. ₦80,000

C. ₦90,000

D. ₦100,000

Correct Answer: A

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Question 18

A company's trial balance shows the following balances: Accounts Payable ₦10,000, Sales Revenue ₦20,000, Cost of Goods Sold ₦15,000. What is the net profit of the company?

A. ₦5,000

Correct B. ₦10,000

C. ₦15,000

D. ₦20,000

Correct Answer: B

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Question 19

A company's bank reconciliation statement shows a difference of ₦1,500 between the company's cash book balance and the bank statement balance. The company's cash book balance is ₦20,000. What is the bank statement balance?

A. ₦21,500

Correct B. ₦22,500

C. ₦23,500

D. ₦24,500

Correct Answer: B

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Question 20

A company's cash book shows the following transactions: Cash received from customers ₦10,000, Cash paid to suppliers ₦5,000, Cash received from bank ₦8,000. What is the net increase in cash?

A. ₦3,000

B. ₦5,000

Correct C. ₦8,000

D. ₦10,000

Correct Answer: C

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Question 21

A partnership between two individuals, John and Jane, has the following capital accounts: John's capital account has a balance of ₦150,000 and Jane's capital account has a balance of ₦100,000. If the partnership's total assets are valued at ₦400,000, what is the value of the partnership's liabilities?

A. ₦50,000

B. ₦75,000

C. ₦100,000

Correct D. ₦125,000

Correct Answer: D

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Question 22

A company uses the double-entry system of accounting. The following transactions occurred during the month of January: Purchased office supplies for ₦10,000, Sold goods for ₦50,000, and Paid rent of ₦20,000. What is the total amount of assets acquired during the month?

A. ₦30,000

B. ₦40,000

Correct C. ₦50,000

D. ₦60,000

Correct Answer: C

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Question 23

A company has the following incomplete records: Opening capital of ₦100,000, Purchases of ₦80,000, Sales of ₦120,000, and Closing capital of ₦150,000. What is the net profit of the company?

A. ₦20,000

B. ₦30,000

C. ₦40,000

Correct D. ₦50,000

Correct Answer: D

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Question 24

A manufacturing company has the following departmental accounts: Production department has a balance of ₦200,000, Sales department has a balance of ₦150,000, and Administration department has a balance of ₦100,000. What is the total amount of assets acquired during the year?

A. ₦450,000

B. ₦500,000

Correct C. ₦550,000

D. ₦600,000

Correct Answer: C

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Question 25

A company uses the straight-line method of depreciation. The asset's cost is ₦100,000, and its useful life is 5 years. What is the annual depreciation charge?

A. ₦10,000

B. ₦20,000

Correct C. ₦30,000

D. ₦40,000

Correct Answer: C

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