POST UTME WELLSPRING UNIVERSITY 2022 Accounting | Objective

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Question 1
A partnership is formed between two individuals, A and B, with a capital of ₦1,000,000. The profit-sharing ratio is 3:2. If the profit for the year is ₦500,000, calculate the amount of profit that will be shared by A.
Correct A. ₦300,000
B. ₦200,000
C. ₦250,000
D. ₦350,000

Correct Answer: A

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Question 2
A company uses the straight-line method of depreciation for its assets. If the asset cost ₦500,000 and has a residual value of ₦50,000, calculate the annual depreciation charge for the asset.
A. ₦25,000
Correct B. ₦30,000
C. ₦35,000
D. ₦40,000

Correct Answer: B

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Question 3
A government agency has the following transactions for the year: - Received ₦1,000,000 from the treasury - Paid ₦500,000 for salaries - Received ₦200,000 from the sale of assets - Paid ₦300,000 for maintenance Calculate the net cash inflow for the year.
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦350,000

Correct Answer: A

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Question 4
A company has the following ledger balances: - Cash: ₦500,000 - Accounts Payable: ₦200,000 - Sales Revenue: ₦1,000,000 - Cost of Goods Sold: ₦800,000 Prepare a trial balance for the company.
Correct A. Cash: ₦500,000; Accounts Payable: ₦200,000; Sales Revenue: ₦1,000,000; Cost of Goods Sold: ₦800,000
B. Cash: ₦500,000; Accounts Payable: ₦200,000; Sales Revenue: ₦800,000; Cost of Goods Sold: ₦1,000,000
C. Cash: ₦500,000; Accounts Payable: ₦800,000; Sales Revenue: ₦1,000,000; Cost of Goods Sold: ₦200,000
D. Cash: ₦800,000; Accounts Payable: ₦200,000; Sales Revenue: ₦1,000,000; Cost of Goods Sold: ₦500,000

Correct Answer: A

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Question 5
A company has the following transactions for the year: - Sold goods for ₦1,000,000 - Purchased goods for ₦800,000 - Received cash from customers for ₦500,000 - Paid cash to suppliers for ₦200,000 Prepare a journal entry for the company.
Correct A. Debit: Sales Revenue ₦1,000,000; Credit: Cash ₦500,000
B. Debit: Purchases ₦800,000; Credit: Cash ₦200,000
C. Debit: Sales Revenue ₦1,000,000; Credit: Accounts Receivable ₦500,000
D. Debit: Purchases ₦800,000; Credit: Accounts Payable ₦200,000

Correct Answer: A

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Question 6
In a partnership account, if the capital of one partner is increased by ₦50,000 and the capital of another partner is decreased by ₦20,000, what is the net effect on the total capital of the partnership?
Correct A. ₦30,000 increase
B. ₦30,000 decrease
C. ₦10,000 increase
D. ₦10,000 decrease

Correct Answer: A

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Question 7
A company uses the straight-line method of depreciation. If the asset's useful life is 5 years and the residual value is ₦20,000, what is the annual depreciation charge if the asset's cost is ₦150,000?
A. ₦20,000
Correct B. ₦25,000
C. ₦30,000
D. ₦35,000

Correct Answer: B

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Question 8
A bank reconciliations statement shows a difference of ₦15,000 between the bank statement balance and the cash book balance. The bank statement balance includes an outstanding cheque of ₦5,000 and a bank charge of ₦10,000. What is the correct explanation for the difference?
A. The bank has made an error in recording the outstanding cheque.
B. The bank has made an error in recording the bank charge.
Correct C. The cash book has an error in recording the outstanding cheque.
D. The cash book has an error in recording the bank charge.

Correct Answer: C

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Question 9
A company's trading account shows a profit of ₦100,000. The company's profit and loss account shows a net profit of ₦120,000. What is the correct explanation for the difference?
A. The company has made an error in recording the trading account.
B. The company has made an error in recording the profit and loss account.
C. The company has made an error in recording the depreciation.
Correct D. The company has made an error in recording the interest on loans.

Correct Answer: D

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Question 10
A company's balance sheet shows a total assets of ₦500,000 and a total liabilities of ₦300,000. What is the company's net worth?
Correct A. ₦200,000
B. ₦300,000
C. ₦400,000
D. ₦500,000

Correct Answer: A

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Question 11
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. 60
Correct B. 72
C. 80
D. 90

Correct Answer: B

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Question 12
A company has the following transactions: Debit: Raw Materials ₦ 10,000, Work-in-Progress ₦ 20,000, Finished Goods ₦ 30,000, Credit: Purchases ₦ 40,000, Wages ₦ 50,000, What is the net effect of these transactions on the company's Cash account?
Correct A. ₦ 20,000
B. ₦ 30,000
C. ₦ 40,000
D. ₦ 50,000

Correct Answer: A

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Question 13
A company has the following trial balance: Debit: ₦ 100,000, Credit: ₦ 120,000, What is the correct journal entry to rectify the discrepancy?
Correct A. Debit: ₦ 20,000, Credit: ₦ 20,000
B. Debit: ₦ 20,000, Credit: ₦ 10,000
C. Debit: ₦ 10,000, Credit: ₦ 20,000
D. Debit: ₦ 10,000, Credit: ₦ 10,000

Correct Answer: A

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Question 14
A company uses the following control accounts: Cash ₦ 100,000, Accounts Payable ₦ 50,000, What is the correct formula to calculate the balance of the Cash account?
A. Cash + Accounts Payable
Correct B. Cash - Accounts Payable
C. Cash + Accounts Payable + Sales
D. Cash - Accounts Payable - Sales

Correct Answer: B

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Question 15
A company has the following bank reconciliation statement: Bank Balance: ₦ 50,000, What is the correct explanation for the discrepancy?
A. Bank Error
B. Customer Error
Correct C. Company Error
D. Bank Interest

Correct Answer: C

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Question 16
A company has two departments: Manufacturing and Sales. The Manufacturing department has a direct labor cost of ₦120,000 and an indirect labor cost of ₦80,000. The Sales department has a direct labor cost of ₦90,000 and an indirect labor cost of ₦60,000. What is the total direct labor cost for both departments?
Correct A. ₦210,000
B. ₦220,000
C. ₦230,000
D. ₦240,000

Correct Answer: A

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Question 17
A company has a trial balance that includes the following accounts: Accounts Payable ₦100,000, Accounts Receivable ₦80,000, and Sales Revenue ₦120,000. What is the total amount of assets on the balance sheet?
Correct A. ₦200,000
B. ₦220,000
C. ₦240,000
D. ₦260,000

Correct Answer: A

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Question 18
A company issues 1,000 shares of stock at ₦10 per share. What is the total amount of cash received from the sale of these shares?
A. ₦10,000
Correct B. ₦20,000
C. ₦30,000
D. ₦40,000

Correct Answer: B

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Question 19
A company has a control account for its Accounts Payable account. The control account shows a balance of ₦120,000, and the subsidiary ledger shows a balance of ₦100,000. What is the difference between the two balances?
Correct A. ₦20,000
B. ₦30,000
C. ₦40,000
D. ₦50,000

Correct Answer: A

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Question 20
A company has a building with a cost of ₦500,000 and a useful life of 10 years. What is the annual depreciation expense using the straight-line method?
A. ₦50,000
B. ₦60,000
C. ₦70,000
Correct D. ₦80,000

Correct Answer: D

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Question 21
A company uses the weighted average method to value its inventory. The company has three types of inventory: raw materials, work-in-progress, and finished goods. The raw materials have a cost of ₦10,000 and a weightage of 30%. The work-in-progress has a cost of ₦20,000 and a weightage of 40%. The finished goods have a cost of ₦30,000 and a weightage of 30%. Calculate the total value of the inventory.
A. ₦20,000
Correct B. ₦22,000
C. ₦24,000
D. ₦26,000

Correct Answer: B

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Question 22
A company has the following transactions: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 | Cash | 10,000 | | | 2 | Equipment | | 15,000 | | 3 | Accounts Payable | | 5,000 | | 4 | Sales | | 20,000 | What is the total amount of the company's assets?
A. ₦25,000
B. ₦30,000
C. ₦35,000
Correct D. ₦40,000

Correct Answer: D

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Question 23
A company uses the double-entry system of accounting. The company has the following transactions: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 | Cash | 10,000 | | | 2 | Equipment | | 15,000 | | 3 | Accounts Payable | | 5,000 | | 4 | Sales | | 20,000 | What is the total amount of the company's liabilities?
A. ₦5,000
B. ₦10,000
C. ₦15,000
Correct D. ₦20,000

Correct Answer: D

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Question 24
A company has the following trial balance: | Account | Debit | Credit | | --- | --- | --- | | Cash | 10,000 | | | Equipment | | 15,000 | | Accounts Payable | | 5,000 | | Sales | | 20,000 | What is the total amount of the company's assets?
A. ₦25,000
B. ₦30,000
C. ₦35,000
Correct D. ₦40,000

Correct Answer: D

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Question 25
A company has the following transactions: | Date | Description | Debit | Credit | | --- | --- | --- | --- | | 1 | Cash | 10,000 | | | 2 | Equipment | | 15,000 | | 3 | Accounts Payable | | 5,000 | | 4 | Sales | | 20,000 | What is the total amount of the company's liabilities?
A. ₦5,000
B. ₦10,000
C. ₦15,000
Correct D. ₦20,000

Correct Answer: D

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