WAEC Accounting OBJ
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F/ACCOUNTING-OBJ!
1. D — managers
2. D — entity concept
3. C — executives honorarium
4. A — current asset
5. C — capital
6. A — journal proper
7. A — Le 386,000
8. C — Le 522,000
9. C — Le 282,000
10. A — returns inwards journal
11. B — D 44,000
12. C — D 6,000
13. A — cash refund from suppliers
14. C — profit and loss account
15. D — net sales
16. B — capital
17. B — prudence concept
18. B — accumulated fund
19. B — in two ledger accounts
20. B — $7,085
21. B — a creditor
22. C — Le 16,000
23. C — Le 32,000
24. A — accounting equation
25. D — net loss
26. A — credited to current account
27. C — loss of Le 13,000
28. D — decrease of Le 15,000
29. B — entity concept
30. C — reduction in provision for doubtful debts
31. C — N 35,160
32. B — N 21,096
33. A — revenue expenditure
34. A — an asset
35. D — N 95,000
36. B — N 271,000
37. C — purchase consideration
38. D — liability clause of the company
39. B — trial balance
40. D — debenture interest
41. B — equals the net assets
42. C — voucher
43. C — Purchases ledger control account
44. D — $660
45. A — profit and loss account
46. D — Le 134,000
47. C — Le 70,000
48. D — 1:1
49. D — GHe 200,000
50. B — quality of labour
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WAEC Accounting Essay
Number 1
(1a)
The statement Musa Enterprises would prepare is bank reconciliation statement. A bank reconciliation statement is a statement prepared to explain and reconcile the difference between the balance shown in the bank column of the cash book and the balance shown in the bank statement. It helps the business to identify items that have been recorded in one book but not yet recorded in the other.
(1b)
(PICK ANY FOUR)
(i) Unpresented cheques: These are cheques issued by Musa Enterprises to creditors but have not yet been presented to the bank for payment. They will reduce the cash book balance but will not yet reduce the bank statement balance.
(ii) Uncredited lodgements: These are cheques or cash paid into the bank by Musa Enterprises but have not yet been credited by the bank. They will increase the cash book balance but will not yet appear in the bank statement.
(iii) Bank charges: These are charges made by the bank for services rendered to Musa Enterprises. They may appear in the bank statement before being recorded in the cash book.
(iv) Standing order: This is an instruction given to the bank to make regular payments on behalf of the business. It may be recorded by the bank before Musa Enterprises records it in the cash book.
(v) Dishonoured cheques: These are cheques received from customers and paid into the bank but later rejected by the bank. They may have been recorded in the cash book before the business is informed by the bank.
(vi) Direct credit: This occurs when money is paid directly into Musa Enterprises’ bank account by a customer. It may appear in the bank statement before being recorded in the cash book.
(vii) Interest allowed by the bank: This is interest credited by the bank to Musa Enterprises’ account. It may appear in the bank statement before the business records it in the cash book.
(viii) Errors in the cash book or bank statement: Mistakes may be made either by Musa Enterprises in the cash book or by the bank in the bank statement, thereby causing disagreement between the two balances.
Number 2
(2a)
The tool employed by the analyst is accounting ratio. Accounting ratio is the relationship between two related accounting figures expressed as a percentage, fraction or proportion. It is used to measure the financial performance, profitability, liquidity and efficiency of a business.
(2b)
(i) Profitability ratios
(ii) Liquidity ratios
(iii) Efficiency/activity ratios
(iv) Solvency/gearing ratios
(v) Investment ratios
(2c)
(i) Ratios are based on historical information and may not show the present or future position of the business.
(ii) Ratios can be affected by different accounting policies used by different businesses.
(iii) Ratios do not consider non-financial factors such as quality of management, workers’ morale and customer satisfaction.
(iv) Ratios may be misleading if the financial statements used are incorrect or manipulated.
(v) Ratios are only useful when compared with previous years, other firms or industry standards.
(vi) Inflation can affect accounting figures and make ratio comparison unreliable.
Number 3
(i) Business entity concept: This concept states that the business is treated as a separate unit from its owner. This means that the private transactions of the owner must be kept separate from the transactions of the business. For example, if the owner withdraws cash from the business for personal use, it is recorded as drawings and not as a business expense.
(ii) Going concern concept: This concept assumes that a business will continue to operate for a long period of time and will not be closed down in the near future. Because of this, assets are recorded on the basis that they will continue to be used in the business and not sold immediately.
(iii) Realization concept: This concept states that revenue should be recognized only when it is earned, whether cash has been received or not. This means that sales are recorded when goods are sold or services are rendered, not necessarily when payment is received.
(iv) Materiality concept: This concept states that only important items that can affect the decision of users of financial statements should be recorded and disclosed separately. Small or insignificant items may be treated in a simple way because they may not affect business decisions.
(v) Consistency concept: This concept states that a business should use the same accounting methods from one accounting period to another. This makes it easy to compare the financial statements of different years. For example, if a business uses straight-line method of depreciation, it should continue to use it unless there is a good reason to change.
Number 4
(4a)
(i) Heating and lighting: Floor area occupied by each department.
(ii) Advertisement: Sales value of each department.
(iii) Canteen expenses: Number of employees in each department.
(iv) Depreciation of building: Floor area occupied by each department.
(v) Insurance of premises: Floor area occupied by each department.
(4b)
(PICK ANY FIVE)
(i) It helps to know the profit or loss made by each department.
(ii) It helps management to compare the performance of different departments.
(iii) It helps to identify departments that are doing well and those that are not doing well.
(iv) It helps management to make decisions on whether to expand or close a department.
(v) It helps in proper apportionment of expenses among departments.
(vi) It helps to control costs in each department.
(vii) It helps to reward hardworking departmental managers and staff.
(viii) It helps to plan and prepare budgets for each department.
(ix) It helps to determine the contribution of each department to the total profit of the business.
Number 5
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