Practice post utme unn accounting 2017 Past Questions

Question 1

A company's trial balance shows an error of ¦0,000 in the balance of the accounts payable account. The correct balance should be ¦1,000. What is the effect of this error on the company's net income?

A. Increases net income by ¦0,000

Correct B. Decreases net income by ¦0,000

C. Has no effect on net income

D. Increases net income by ¦1,000

Correct Answer: B

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Question 2

A company issues 1,000 shares of ¥10 par value stock at ¥12 per share. What is the total amount of cash received from the sale of these shares?

A. ¥10,000

Correct B. ¥10,200

C. ¥10,400

D. ¥10,600

Correct Answer: B

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Question 3

A company purchases a piece of equipment for ¦10,000, paying ¦0% cash and the balance on credit. What is the amount of the note payable?

A. ¥10,000

B. ¥10,400

Correct C. ¥10,800

D. ¥11,200

Correct Answer: C

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Question 4

A company's balance sheet shows total assets of ¦10,000, total liabilities of ¥0,000, and total equity of ¥10,000. What is the company's debt-to-equity ratio?

A. 1:1

B. 1:2

Correct C. 2:1

D. 3:1

Correct Answer: C

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Question 5

A company's trial balance shows an error of ¦0,000 in the balance of the accounts payable account. The correct balance should be ¦1,000. What is the effect of this error on the company's net income?

A. Increases net income by ¦0,000

Correct B. Decreases net income by ¦0,000

C. Has no effect on net income

D. Increases net income by ¦1,000

Correct Answer: B

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Question 6

The following are the financial statements of XYZ Manufacturing Company for the year ended December 31, 2022: Balance Sheet: Assets: Cash: ₦120,000 Accounts Receivable: ₦150,000 Inventory: ₦200,000 Total Assets: ₦470,000 Liabilities: Accounts Payable: ₦100,000 Long-term Debt: ₦200,000 Total Liabilities: ₦300,000 Equity: Common Stock: ₦100,000 Retained Earnings: ₦70,000 Total Equity: ₦170,000 What is the company's current ratio?

A. 2.00

B. 1.50

Correct C. 1.33

D. 1.20

Correct Answer: C

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Question 7

A company issues 1,000 shares of its common stock at ₦50 per share. If the company also issues 500 shares of its 8% preferred stock at ₦75 per share, what is the total amount of cash received from the sale of these shares?

A. ₦75,000

Correct B. ₦80,000

C. ₦85,000

D. ₦90,000

Correct Answer: B

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Question 8

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 has a net income of ₦120,000, how much of the net income will Partner A receive?

Correct A. ₦72,000

B. ₦80,000

C. ₦90,000

D. ₦100,000

Correct Answer: A

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Question 9

A company uses the straight-line method to depreciate its assets. If the asset has a useful life of 10 years and a cost of ₦200,000, what is the annual depreciation expense?

A. ₦20,000

B. ₦25,000

Correct C. ₦30,000

D. ₦35,000

Correct Answer: C

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Question 10

A company has the following cash transactions for the month of January: Cash received from customers: ₦150,000 Cash paid to suppliers: ₦80,000 Cash paid for rent: ₦20,000 Cash received from bank loan: ₦50,000 What is the company's net cash inflow for the month?

A. ₦60,000

B. ₦70,000

Correct C. ₦80,000

D. ₦90,000

Correct Answer: C

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Question 11

A company issued 10,000 shares of ₦5 each at a premium of ₦2. The shares were sold for ₦7 each. Prepare the journal entries for the issue of shares and the sale of shares.

Correct A. Debit Share Capital ₦100,000, Credit Cash ₦100,000

B. Debit Share Capital ₦50,000, Credit Cash ₦50,000

C. Debit Share Capital ₦200,000, Credit Cash ₦200,000

D. Debit Share Capital ₦150,000, Credit Cash ₦150,000

Correct Answer: A

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Question 12

A company purchased a machine for ₦120,000. The machine is expected to have a useful life of 5 years and a residual value of ₦20,000. Calculate the annual depreciation using the straight-line method.

A. ₦20,000 per annum

Correct B. ₦22,000 per annum

C. ₦24,000 per annum

D. ₦26,000 per annum

Correct Answer: B

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Question 13

A company has the following ledger balances: Cash ₦50,000, Debtors ₦80,000, Creditors ₦30,000. Prepare the trial balance.

Correct A. Cash ₦50,000, Debtors ₦80,000, Creditors ₦30,000

B. Cash ₦80,000, Debtors ₦50,000, Creditors ₦30,000

C. Cash ₦50,000, Debtors ₦30,000, Creditors ₦80,000

D. Cash ₦80,000, Debtors ₦30,000, Creditors ₦50,000

Correct Answer: A

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Question 14

A company issued 10,000 debentures of ₦100 each at a discount of 5%. The debentures were issued at a premium of ₦2. Prepare the journal entries for the issue of debentures.

A. Debit Debenture Capital ₦950,000, Credit Cash ₦950,000

B. Debit Debenture Capital ₦1,000,000, Credit Cash ₦1,000,000

Correct C. Debit Debenture Capital ₦1,050,000, Credit Cash ₦1,050,000

D. Debit Debenture Capital ₦1,100,000, Credit Cash ₦1,100,000

Correct Answer: C

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Question 15

A company purchased a machine for ₦150,000. The machine is expected to have a useful life of 5 years and a residual value of ₦20,000. Calculate the annual depreciation using the straight-line method.

A. ₦28,000 per annum

Correct B. ₦30,000 per annum

C. ₦32,000 per annum

D. ₦34,000 per annum

Correct Answer: B

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Question 16

A partnership is formed between two individuals, A and B, with a capital of ₦100,000 each. The profit-sharing ratio is 3:2. If the profit for the year is ₦150,000, calculate the amount of profit that will be shared by A.

Correct A. ₦90,000

B. ₦60,000

C. ₦45,000

D. ₦30,000

Correct Answer: A

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Question 17

A company issues 5,000, 9% debentures of ₦100 each at a discount of 5%. Calculate the amount of discount on the debentures.

Correct A. ₦25,000

B. ₦20,000

C. ₦30,000

D. ₦15,000

Correct Answer: A

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Question 18

A company's trading account for the year shows a profit of ₦200,000. The company also has a non-trading income of ₦50,000. Calculate the total profit for the year.

Correct A. ₦250,000

B. ₦220,000

C. ₦200,000

D. ₦180,000

Correct Answer: A

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Question 19

A company's balance sheet shows a total assets of ₦500,000 and a total liabilities of ₦300,000. Calculate the company's net worth.

Correct A. ₦200,000

B. ₦250,000

C. ₦300,000

D. ₦400,000

Correct Answer: A

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Question 20

A company's depreciation policy is to depreciate its assets by 10% per annum. If the asset is valued at ₦100,000, calculate the value of the asset after 2 years.

Correct A. ₦81,000

B. ₦90,000

C. ₦100,000

D. ₦110,000

Correct Answer: A

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Question 21

A company's trial balance shows an error of ¦5,000 due to an incorrect posting. The error is discovered during the preparation of the balance sheet. What is the correct journal entry to rectify the error?

A. Debit Cash ¦5,000, Credit Profit and Loss Account ¦5,000

Correct B. Debit Profit and Loss Account ¦5,000, Credit Cash ¦5,000

C. Debit Profit and Loss Account ¦5,000, Credit Capital ¦5,000

D. Debit Capital ¦5,000, Credit Profit and Loss Account ¦5,000

Correct Answer: B

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Question 22

A company uses the straight-line method of depreciation. If the cost of the asset is ¦10,000 and its useful life is 5 years, what is the annual depreciation charge?

Correct A. ¡2,000

B. ¡5,000

C. ¦10,000

D. ¦5,000

Correct Answer: A

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Question 23

A company's balance sheet shows an asset of ¦10,000, which is valued at ¦5,000. What is the amount of depreciation to be charged?

Correct A. ¥,000

B. ¦10,000

C. ¦5,000

D. ¦10,000

Correct Answer: A

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Question 24

A company's profit and loss account shows a profit of ¦10,000. If the company's capital is ¦10,000, what is the amount of dividends to be declared?

A. ¦10,000

Correct B. ¦5,000

C. ¦10,000

D. ¦5,000

Correct Answer: B

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Question 25

A company's balance sheet shows a liability of ¦10,000. If the company's assets are ¦10,000, what is the amount of equity?

Correct A. ¦10,000

B. ¦10,000

C. ¦10,000

D. ¦10,000

Correct Answer: A

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