POST UTME WELLSPRING UNIVERSITY 2024 Accounting | Objective

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Question 1
A company issued 10,000 shares of 50 kobo each at a premium of 20%. Calculate the total amount received from the issue of shares.
A. ₦250,000
Correct B. ₦500,000
C. ₦750,000
D. ₦1,000,000

Correct Answer: B

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Question 2
A company's cash book shows the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Cash | 1,000 | | | 2nd Jan | Cash | 500 | | | 3rd Jan | Bank | | 1,500 | What is the balance in the cash account?
Correct A. ₦1,500
B. ₦2,000
C. ₦2,500
D. ₦3,000

Correct Answer: A

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Question 3
A company's balance sheet as at 31st December 2022 is as follows: | Assets | | | | | | --- | --- | --- | --- | --- | | Cash | | | | | | Debtors | | | | | | Stock | | | | | | Total Assets | | | | | | Liabilities | | | | | | Creditors | | | | | | Capital | | | | | | Total Liabilities | | | | | What is the value of the company's capital?
A. ₦100,000
B. ₦150,000
Correct C. ₦200,000
D. ₦250,000

Correct Answer: C

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Question 4
A company's cash book shows the following transactions: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Cash | 1,000 | | | 2nd Jan | Bank | | 500 | | 3rd Jan | Cash | | 1,500 | What is the balance in the bank account?
Correct A. ₦1,500
B. ₦2,000
C. ₦2,500
D. ₦3,000

Correct Answer: A

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Question 5
A company issued 10,000 shares of 50 kobo each at a premium of 20%. Calculate the total amount received from the issue of shares.
A. ₦250,000
Correct B. ₦500,000
C. ₦750,000
D. ₦1,000,000

Correct Answer: B

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Question 6
A company issued 5,000, 10% debentures of ₦100 each. The debentures are redeemable at a premium of 10% after 5 years. Calculate the amount of premium payable on redemption.
A. ₦500,000
B. ₦1,000,000
Correct C. ₦1,500,000
D. ₦2,000,000

Correct Answer: C

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Question 7
A company's trial balance showed the following balances: Cash ₦50,000, Accounts Payable ₦20,000, Common Stock ₦100,000, and Retained Earnings ₦30,000. Prepare a balance sheet for the company.
Correct A. Assets: ₦50,000, Liabilities: ₦20,000, Equity: ₦130,000
B. Assets: ₦100,000, Liabilities: ₦20,000, Equity: ₦80,000
C. Assets: ₦50,000, Liabilities: ₦100,000, Equity: ₦30,000
D. Assets: ₦20,000, Liabilities: ₦50,000, Equity: ₦130,000

Correct Answer: A

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Question 8
A company uses the single-entry system of accounting. The company's journal entries for the year are as follows: Debit Cash ₦50,000, Credit Accounts Payable ₦20,000, Debit Common Stock ₦100,000, and Credit Retained Earnings ₦30,000. Prepare a trial balance for the company.
Correct A. Cash ₦50,000, Accounts Payable ₦20,000, Common Stock ₦100,000, Retained Earnings ₦30,000
B. Cash ₦100,000, Accounts Payable ₦20,000, Common Stock ₦50,000, Retained Earnings ₦30,000
C. Cash ₦50,000, Accounts Payable ₦100,000, Common Stock ₦20,000, Retained Earnings ₦30,000
D. Cash ₦50,000, Accounts Payable ₦20,000, Common Stock ₦100,000, Retained Earnings ₦100,000

Correct Answer: A

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Question 9
A company's balance sheet showed the following balances: Cash ₦50,000, Accounts Payable ₦20,000, Common Stock ₦100,000, and Retained Earnings ₦30,000. Prepare a statement of stockholders' equity for the company.
Correct A. Common Stock ₦100,000, Retained Earnings ₦30,000, Total Equity ₦130,000
B. Common Stock ₦50,000, Retained Earnings ₦100,000, Total Equity ₦150,000
C. Common Stock ₦100,000, Retained Earnings ₦50,000, Total Equity ₦150,000
D. Common Stock ₦50,000, Retained Earnings ₦30,000, Total Equity ₦80,000

Correct Answer: A

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Question 10
A company issued 5,000, 10% debentures of ₦100 each. The debentures are redeemable at a premium of 10% after 5 years. Calculate the amount of premium payable on redemption.
A. ₦500,000
B. ₦1,000,000
Correct C. ₦1,500,000
D. ₦2,000,000

Correct Answer: C

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Question 11
A manufacturing company uses a job costing system. The company has two departments: Cutting and Assembly. The Cutting department incurs costs of ₦120,000 and ₦80,000 in direct materials and direct labor, respectively. The Assembly department incurs costs of ₦150,000 and ₦100,000 in direct materials and direct labor, respectively. The company produces 500 units of a product. The selling price per unit is ₦2,500. The company's overhead rate is 150% of direct labor costs. Calculate the total cost of production.
A. ₦1,475,000
Correct B. ₦1,525,000
C. ₦1,575,000
D. ₦1,625,000

Correct Answer: B

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Question 12
A partnership is formed between three individuals: John, Mary, and David. John contributes ₦500,000, Mary contributes ₦300,000, and David contributes ₦200,000. The partnership earns a profit of ₦150,000. The profit is divided in the ratio 2:3:4. Calculate the amount of profit each partner will receive.
A. ₦100,000
B. ₦120,000
Correct C. ₦150,000
D. ₦180,000

Correct Answer: C

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Question 13
A company's trial balance shows the following accounts: Sales ₦500,000, Cost of Goods Sold ₦300,000, and Profit ₦200,000. The company's balance sheet shows the following accounts: Cash ₦100,000, Accounts Payable ₦50,000, and Common Stock ₦200,000. Calculate the company's net income.
Correct A. ₦200,000
B. ₦250,000
C. ₦300,000
D. ₦350,000

Correct Answer: A

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Question 14
A company's balance sheet shows the following accounts: Cash ₦150,000, Accounts Payable ₦75,000, and Common Stock ₦250,000. The company's income statement shows the following accounts: Sales ₦600,000, Cost of Goods Sold ₦400,000, and Net Income ₦150,000. Calculate the company's total assets.
A. ₦525,000
B. ₦575,000
Correct C. ₦625,000
D. ₦675,000

Correct Answer: C

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Question 15
A company's trial balance shows the following accounts: Sales ₦800,000, Cost of Goods Sold ₦500,000, and Profit ₦300,000. The company's balance sheet shows the following accounts: Cash ₦200,000, Accounts Payable ₦100,000, and Common Stock ₦400,000. Calculate the company's net income.
Correct A. ₦300,000
B. ₦350,000
C. ₦400,000
D. ₦450,000

Correct Answer: A

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Question 16
A company issued 5,000 10% debentures of ₦100 each at a discount of 5%. Calculate the amount of discount and the amount of interest paid annually.
Correct A. ₦50,000
B. ₦25,000
C. ₦20,000
D. ₦30,000

Correct Answer: A

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Question 17
A trader records the following transactions in his cash book: | Date | Particulars | Debit | Credit | | --- | --- | --- | --- | | 1st Jan | Cash | ₦1,000 | | | 2nd Jan | Bank | | ₦500 | | 3rd Jan | Cash | | ₦800 | What is the balance of the cash account?
Correct A. ₦200
B. ₦500
C. ₦800
D. ₦1,000

Correct Answer: A

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Question 18
A company's trial balance shows the following balances: | Account | Debit | Credit | | --- | --- | --- | | Sales | ₦100,000 | | | Purchases | | ₦80,000 | | Wages | ₦20,000 | | | Rent | | ₦10,000 | What is the total of the debit balances?
Correct A. ₦120,000
B. ₦100,000
C. ₦80,000
D. ₦120,000

Correct Answer: A

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Question 19
A company's balance sheet shows the following balances: | Asset | Liability | Equity | | --- | --- | --- | | Cash | ₦50,000 | | | Bank | | ₦30,000 | | Stock | ₦20,000 | | | Debtors | | ₦10,000 | What is the total of the equity?
Correct A. ₦50,000
B. ₦30,000
C. ₦20,000
D. ₦10,000

Correct Answer: A

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Question 20
A company's profit and loss account shows the following balances: | Revenue | Expense | | --- | --- | | ₦100,000 | ₦80,000 | What is the net profit?
Correct A. ₦20,000
B. ₦10,000
C. ₦5,000
D. ₦0

Correct Answer: A

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Question 21
In a single entry system, a business records a transaction by debiting the cash account and crediting the sales account. What is the effect of this transaction on the accounting equation?
A. Increases assets and equity
B. Decreases assets and equity
C. Increases assets but decreases equity
Correct D. Decreases assets but increases equity

Correct Answer: D

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Question 22
A company issues 1,000 shares of 10 par value at a premium of 5 per share. What is the total amount received from the sale of these shares?
A. ₦1,000,000
Correct B. ₦1,500,000
C. ₦2,000,000
D. ₦2,500,000

Correct Answer: B

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Question 23
A partnership has two partners, A and B, who share profits and losses in the ratio 3:2. If the total profit for the year is ₦120,000, how much will A receive?
Correct A. ₦90,000
B. ₦80,000
C. ₦70,000
D. ₦60,000

Correct Answer: A

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Question 24
A company uses the double-entry system to record a transaction. The journal entry is as follows: Debit Cash ₦10,000, Credit Accounts Payable ₦10,000. What is the effect of this transaction on the accounting equation?
A. Increases assets and equity
B. Decreases assets and equity
C. Increases assets but decreases equity
Correct D. Decreases assets but increases equity

Correct Answer: D

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Question 25
A company has a control account for its accounts payable. The control account balance is ₦50,000, and the ledger account balance is ₦60,000. What is the reason for the difference?
A. The control account is understated
Correct B. The control account is overstated
C. The ledger account is understated
D. The ledger account is overstated

Correct Answer: B

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