POST UTME SKYLINE UNIVERSITY 2021 Accounting | Objective

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Question 1
A company purchases a machine for ₦1,500,000 and depreciates it using the straight-line method over a period of 5 years. If the annual depreciation is ₦150,000, what is the accumulated depreciation at the end of the 3rd year?
A. ₦300,000
Correct B. ₦450,000
C. ₦600,000
D. ₦900,000

Correct Answer: B

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Question 2
A company has the following transactions in its cash book: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Cash | 10,000 | | | 2nd Jan | Bank | | 8,000 | | 3rd Jan | Cash | | 2,000 | | 4th Jan | Bank | | 1,000 | What is the balance in the cash account?
Correct A. ₦10,000
B. ₦8,000
C. ₦2,000
D. ₦1,000

Correct Answer: A

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Question 3
A company issues 10,000 shares of ₦1 each at a premium of ₦0.50 per share. If the company receives a cash payment of ₦50,000, what is the amount received from the issue of shares?
A. ₦5,000
B. ₦10,000
Correct C. ₦50,000
D. ₦100,000

Correct Answer: C

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Question 4
A company has the following ledger account: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Sales | | 10,000 | | 2nd Jan | Purchases | 8,000 | | | 3rd Jan | Sales | | 2,000 | | 4th Jan | Purchases | | 1,000 | What is the balance in the sales account?
Correct A. ₦10,000
B. ₦8,000
C. ₦2,000
D. ₦1,000

Correct Answer: A

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Question 5
A company has the following incomplete records: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Cash | 10,000 | | | 2nd Jan | Bank | | 8,000 | | 3rd Jan | Cash | | 2,000 | | 4th Jan | Bank | | 1,000 | What is the balance in the cash account?
Correct A. ₦10,000
B. ₦8,000
C. ₦2,000
D. ₦1,000

Correct Answer: A

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Question 6
A company issued 5,000, 10% debentures of ₦100 each at a discount of 5%. The debentures are redeemable at the end of 5 years. Prepare the journal entries for the following transactions: (i) issue of debentures, (ii) interest on debentures for the first year, and (iii) redemption of debentures.
Correct A. Debit Cash ₦450,000; Credit Debentures ₦450,000
B. Debit Debentures ₦450,000; Credit Cash ₦450,000
C. Debit Cash ₦500,000; Credit Debentures ₦500,000
D. Debit Debentures ₦500,000; Credit Cash ₦500,000

Correct Answer: A

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Question 7
A company's trial balance as at 31st December, 2021 is as follows: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦50,000 | ₦0 | | Bank | ₦0 | ₦100,000 | | Sales | ₦0 | ₦200,000 | | Purchases | ₦150,000 | ₦0 | | Wages | ₦0 | ₦50,000 | | Rent | ₦20,000 | ₦0 | | Profit | ₦0 | ₦0 | | Loss | ₦0 | ₦0 | The company's accounting year ends on 31st December. Prepare the ledger accounts for the following: (i) Cash, (ii) Bank, (iii) Sales, (iv) Purchases, (v) Wages, (vi) Rent, (vii) Profit, and (viii) Loss.
Correct A. Cash: Debit ₦50,000; Credit ₦0; Bank: Debit ₦0; Credit ₦100,000; Sales: Debit ₦0; Credit ₦200,000; Purchases: Debit ₦150,000; Credit ₦0; Wages: Debit ₦0; Credit ₦50,000; Rent: Debit ₦20,000; Credit ₦0; Profit: Debit ₦0; Credit ₦0; Loss: Debit ₦0; Credit ₦0
B. Cash: Debit ₦0; Credit ₦50,000; Bank: Debit ₦100,000; Credit ₦0; Sales: Debit ₦200,000; Credit ₦0; Purchases: Debit ₦0; Credit ₦150,000; Wages: Debit ₦50,000; Credit ₦0; Rent: Debit ₦0; Credit ₦20,000; Profit: Debit ₦0; Credit ₦0; Loss: Debit ₦0; Credit ₦0
C. Cash: Debit ₦50,000; Credit ₦0; Bank: Debit ₦0; Credit ₦100,000; Sales: Debit ₦0; Credit ₦200,000; Purchases: Debit ₦150,000; Credit ₦0; Wages: Debit ₦0; Credit ₦50,000; Rent: Debit ₦20,000; Credit ₦0; Profit: Debit ₦0; Credit ₦0; Loss: Debit ₦0; Credit ₦0
D. Cash: Debit ₦0; Credit ₦50,000; Bank: Debit ₦100,000; Credit ₦0; Sales: Debit ₦0; Credit ₦200,000; Purchases: Debit ₦0; Credit ₦150,000; Wages: Debit ₦0; Credit ₦50,000; Rent: Debit ₦0; Credit ₦20,000; Profit: Debit ₦0; Credit ₦0; Loss: Debit ₦0; Credit ₦0

Correct Answer: A

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Question 8
A company's single entry system shows the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Cash | ₦10,000 | ₦0 | | 1st Jan | Sales | ₦0 | ₦10,000 | | 5th Jan | Purchases | ₦8,000 | ₦0 | | 5th Jan | Wages | ₦2,000 | ₦0 | Prepare the journal entries for the following: (i) Cash, (ii) Sales, (iii) Purchases, and (iv) Wages.
Correct A. Cash: Debit ₦10,000; Credit ₦0; Sales: Debit ₦0; Credit ₦10,000; Purchases: Debit ₦8,000; Credit ₦0; Wages: Debit ₦2,000; Credit ₦0
B. Cash: Debit ₦0; Credit ₦10,000; Sales: Debit ₦10,000; Credit ₦0; Purchases: Debit ₦8,000; Credit ₦0; Wages: Debit ₦2,000; Credit ₦0
C. Cash: Debit ₦10,000; Credit ₦0; Sales: Debit ₦0; Credit ₦10,000; Purchases: Debit ₦8,000; Credit ₦0; Wages: Debit ₦2,000; Credit ₦0
D. Cash: Debit ₦0; Credit ₦10,000; Sales: Debit ₦0; Credit ₦10,000; Purchases: Debit ₦8,000; Credit ₦0; Wages: Debit ₦2,000; Credit ₦0

Correct Answer: A

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Question 9
A company's cash book shows a debit balance of ₦12,500. The company's ledger shows a credit balance of ₦15,000 in the bank account. What is the correct journal entry to rectify the discrepancy?
A. ₦2,500 debit to bank account
Correct B. ₦2,500 credit to bank account
C. ₦2,500 debit to cash account
D. ₦2,500 credit to cash account

Correct Answer: B

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Question 10
A manufacturing company produces two products, A and B. Product A requires 2 hours of direct labor and 3 hours of indirect labor, while product B requires 3 hours of direct labor and 2 hours of indirect labor. If the company works 8 hours a day and produces 100 units of product A and 50 units of product B, what is the total labor cost?
A. ₦15,000
B. ₦20,000
Correct C. ₦25,000
D. ₦30,000

Correct Answer: C

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Question 11
A company issues 1,000 shares of ₦10 each at a premium of ₦5 per share. What is the total amount received from the issue of shares?
A. ₦10,000
Correct B. ₦15,000
C. ₦20,000
D. ₦25,000

Correct Answer: B

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Question 12
A company's cash book shows a debit balance of ₦25,000. The company's ledger shows a credit balance of ₦30,000 in the bank account. What is the correct journal entry to rectify the discrepancy?
A. ₦5,000 debit to bank account
Correct B. ₦5,000 credit to bank account
C. ₦5,000 debit to cash account
D. ₦5,000 credit to cash account

Correct Answer: B

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Question 13
A company issues 500 debentures of ₦100 each at a premium of ₦10 per debenture. What is the total amount received from the issue of debentures?
A. ₦50,000
Correct B. ₦55,000
C. ₦60,000
D. ₦65,000

Correct Answer: B

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Question 14
A company's cash book shows a debit balance of ₦15,000. The company's ledger shows a credit balance of ₦20,000 in the bank account. What is the correct journal entry to rectify the discrepancy?
A. ₦5,000 debit to bank account
Correct B. ₦5,000 credit to bank account
C. ₦5,000 debit to cash account
D. ₦5,000 credit to cash account

Correct Answer: B

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Question 15
A company issues 1,500 shares of ₦20 each at a premium of ₦5 per share. What is the total amount received from the issue of shares?
A. ₦30,000
B. ₦35,000
Correct C. ₦40,000
D. ₦45,000

Correct Answer: C

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Question 16
A company has two partners, A and B, who share profits in the ratio 3:2. The capital of the company is divided in the ratio 5:3. If the total profit for the year is ₦120,000 and the total capital is ₦300,000, calculate the amount of profit that partner A will receive.
Correct A. ₦36,000
B. ₦40,000
C. ₦42,000
D. ₦44,000

Correct Answer: A

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Question 17
A company issues 10,000, 9% debentures of ₦100 each at a discount of 5%. Calculate the amount of discount on the debentures.
A. ₦50,000
Correct B. ₦55,000
C. ₦60,000
D. ₦65,000

Correct Answer: B

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Question 18
A company has a trial balance as follows: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦0 | ₦18,000 | | Net Income | ₦0 | ₦2,000 | Identify the error in the trial balance.
A. The debit balance of the Cash account is incorrect.
B. The credit balance of the Accounts Payable account is incorrect.
Correct C. The debit balance of the Sales account is incorrect.
D. The credit balance of the Cost of Goods Sold account is incorrect.

Correct Answer: C

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Question 19
A company has the following ledger accounts: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦0 | ₦18,000 | | Net Income | ₦0 | ₦2,000 | Prepare a corrected trial balance.
Correct A. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦18,000 | ₦0 | | Net Income | ₦2,000 | ₦0 |
B. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦15,000 | ₦0 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦18,000 | ₦0 | | Net Income | ₦2,000 | ₦0 |
C. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦18,000 | | Cost of Goods Sold | ₦0 | ₦18,000 | | Net Income | ₦0 | ₦2,000 |
D. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦18,000 | ₦0 | | Net Income | ₦2,000 | ₦0 |

Correct Answer: A

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Question 20
A company has the following ledger accounts: | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦0 | ₦18,000 | | Net Income | ₦0 | ₦2,000 | Prepare a corrected trial balance.
Correct A. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦18,000 | ₦0 | | Net Income | ₦2,000 | ₦0 |
B. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦15,000 | ₦0 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦18,000 | ₦0 | | Net Income | ₦2,000 | ₦0 |
C. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦18,000 | | Cost of Goods Sold | ₦0 | ₦18,000 | | Net Income | ₦0 | ₦2,000 |
D. | Account | Debit | Credit | | --- | --- | --- | | Cash | ₦10,000 | ₦0 | | Accounts Payable | ₦0 | ₦15,000 | | Sales | ₦20,000 | ₦0 | | Cost of Goods Sold | ₦18,000 | ₦0 | | Net Income | ₦2,000 | ₦0 |

Correct Answer: A

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Question 21
A company's trial balance shows a debit balance of ₦15,000 in the account 'Office Equipment' and a credit balance of ₦20,000 in the account 'Office Supplies'. What is the correct journal entry to record the adjustment for the difference?
A. ₦5,000 debit to Office Equipment and ₦5,000 credit to Office Supplies
Correct B. ₦5,000 debit to Office Supplies and ₦5,000 credit to Office Equipment
C. ₦10,000 debit to Office Equipment and ₦10,000 credit to Office Supplies
D. ₦10,000 debit to Office Supplies and ₦10,000 credit to Office Equipment

Correct Answer: B

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Question 22
A company's balance sheet shows a current ratio of 2:1. If the total current assets are ₦120,000 and the total current liabilities are ₦60,000, what is the correct interpretation of the current ratio?
Correct A. The company has sufficient liquidity to meet its short-term obligations
B. The company has insufficient liquidity to meet its short-term obligations
C. The company has a moderate level of liquidity to meet its short-term obligations
D. The company has an excessive level of liquidity to meet its short-term obligations

Correct Answer: A

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Question 23
A company's trial balance shows a debit balance of ₦10,000 in the account 'Rent Expense' and a credit balance of ₦15,000 in the account 'Rent Received'. What is the correct journal entry to record the adjustment for the difference?
A. ₦5,000 debit to Rent Expense and ₦5,000 credit to Rent Received
Correct B. ₦5,000 debit to Rent Received and ₦5,000 credit to Rent Expense
C. ₦10,000 debit to Rent Expense and ₦10,000 credit to Rent Received
D. ₦10,000 debit to Rent Received and ₦10,000 credit to Rent Expense

Correct Answer: B

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Question 24
A company's balance sheet shows a total assets of ₦500,000 and a total liabilities of ₦300,000. What is the correct interpretation of the company's equity?
A. The company has a net loss of ₦200,000
Correct B. The company has a net income of ₦200,000
C. The company has a retained earnings of ₦200,000
D. The company has a dividend of ₦200,000

Correct Answer: B

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Question 25
A company's trial balance shows a debit balance of ₦20,000 in the account 'Salaries Expense' and a credit balance of ₦25,000 in the account 'Salaries Payable'. What is the correct journal entry to record the adjustment for the difference?
A. ₦5,000 debit to Salaries Expense and ₦5,000 credit to Salaries Payable
Correct B. ₦5,000 debit to Salaries Payable and ₦5,000 credit to Salaries Expense
C. ₦10,000 debit to Salaries Expense and ₦10,000 credit to Salaries Payable
D. ₦10,000 debit to Salaries Payable and ₦10,000 credit to Salaries Expense

Correct Answer: B

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