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THEORY QUESTIONS

WAEC SYLLABUS

1. The manufacturing account is prepared to determine the cost of

A. Trading

B. Production

C. Factory overhead

D. Raw materials used

2. Factory costs excluding prime cost is

A. Overhead

B. Material cost

C. Fixed cost

D. Administration cost

3. An example of direct expense is

A. Insurance

B. Carriage inwards

C. Purchase of raw materials

D. Royalty

4. Which of the following is not shown in the trial balance?

A. Opening stock

B. Closing stock

C. Discounts allowed

D. Discounts received

5. Financial accounting information is for

A. Internal use only

B. External use only

C. Business use only

D. Internal and external use

ANSWERS

6. Which of the following statements is not true?

A. A trial balance is an account having debit and credit sides

B. Expenses, losses and assets have debit balances

C. Revenues, gains and liabilities have credit balances

D. A trial balance is a list of balances extracted form ledger accounts

7. Adobaw extracted a trial balance on 31st December, 2005 and realized that the total of debit balance exceeded the total of credit balance. Pending investigations revealed the difference should be

A. Debited to suspense account

B. Credited to suspense account

C. Debited to asset account

D. Credited to asset account

8. A debit entry in the Cash Account and a corresponding credit entry in Alieu’s Account indicate a

A. Receipt of cash from Alieu

B. Payment of cash to Alieu

C. Sale of goods to Alieu for cash

D. Purchase of goods from Alieu for cash

Use the following information to answer questions 9 to 11.

ANSWERS

11. Gross profit for the year was ₦ 4,650 ₦ 4,200 ₦3,750 ₦2,400

12. The total of the sales journal is posted to the Credit side of the sales ledger Credit side of the sales account Debit side of sales ledger Debit side of sales account

13. A rent of ₦ 12,000 was paid by Taiwo to his landlord by cheque. The double entry in Taiwo’s books is Debit Rent account, credit Bank Account Debit Rent account, credit Taiwo’s account Debit Bank account, credit Rent account Debit Taiwo’s account, credit Rent account

14. The sum of money given to a petty cashier out of which small payments are made is a/an Bonus Loan Advance Float

15. The total of the discount from creditors is transferred to Credit side of Discounts Received Account Debit side of Discounts Received Account Credit side of Discounts Allowed Account Debit side of Discounts Allowed Account

ANSWERS

16. The profit of a sole trader increases his

A. Stock

B. Asset

C. Liability

D. Capital

Use the following information to answer questions 17and 18.

--------------------------------------------------------------₦

Balance as per cash book -------------------------8,000 Cr

Unpresentedcheques -----------------------------14,400

Uncredited cheques --------------------------------2,600

A cheque for ₦ 2,000 paid to a creditor had been entered in error, in the cash column. Bank commission of ₦ 800 had not been entered in the cash book. The debit side of the cash book (bank column) had been undercast by ₦ 5,000.

17. The adjusted balance as per cash book is

A. ₦ 10,800 Cr.

B. ₦ 5,800 Cr.

C. ₦ 5,800 Dr.

D. ₦ 10,800 Dr.

18. The balance as per bank statement is

A. ₦ 8,000 Cr.

B. ₦ 6,000 Cr.

C. ₦ 6,000 Dr.

D. ₦ 8,000 Dr.

Use the following information to answer questions 19 and 20.

Rent receivable accrued 1/01/2005 -------------------------D 3,000

Rent received during the year 2005 ------------------------D 5,000

Rent receivable accrued 31/12/2005 -----------------------D 2,500

19. The entry for rent received in the profit and loss account for the year ended 31st December, 2005 is

A. Credit profit and loss account with D 4,500

B. Credit profit and loss account with D 2,500

C. Debit profit and loss account with D 2,500

D. Debit profit and loss account with D 4,500

20. The rent receivable accrued as at 31st December, 2005 is shown in the balance sheet as

A. Current asset

B. Current liability

C. Long term liability

D. Fixed asset

ANSWERS

21. Items on the left hand side of a total debtors account are debits in the

A. Purchases ledger

B. Sales ledger

C. General ledger

D. Journal ledger

Use the following information to answer questions 23 and 24.

---------------------------------------------------------------------------₦

Opening balance ------------------------------------------------1,894 Dr.

Cheques received from customers -----------------------7,284

Cash received from customers ----------------------------1,236

Returns from customers ---------------------------------------296

Closing balance -------------------------------------------------3,368 Dr

23. Credit sales for the period is

A. ₦ 14,078

B. ₦ 10,290

C. ₦ 8,520

D. ₦ 3,554

24. The closing balance of ₦ 3,368 is classified in the balance sheet as a

A. Fixed asset

B. Current asset

C. Current liability

D. Capital

25. The cost price of a book is Le 9,000 and the selling price is Le 12,000. The mark-up is

A. 66¹/₂%

B. 50 %

C. 33¹/₂ %

D. 25%

ANSWERS

26. In the single entry and incomplete records, the net asset method used to ascertain profit is

A. Net profit at the end of a period – net asset at the beginning of the period = profit + additional capital – drawings

B. Net asset at the end of a period – net asset at the beginning of a period = profit – additional capital – drawings

C. Net asset at the end of a period – net asset at the beginning of a period – drawings

D. Net asset at the end of a period + additional capital – drawings

27. The assumption that a business has perpetual existence is recognized by

A. Entity concept

B. Periodicity concept

C. Going concern concept

D. Realization concept

Use the following information to answer questions 28 and 29

Young Stars Club has a membership of 115 persons. Each member pays an annual subscription of ₦ 50. During the year ended 31st December, 2005, 8 members had not paid their subscriptions.

28. The subscriptions recorded in the Income and Expenditure Account for the year ended 31st December, 2005 is

A. ₦ 5,570

B. ₦ 5,350

C. ₦ 400

D. ₦ 115

29. The subscriptions shown in the Balance Sheet as at 31st December, 2005 is

A. ₦ 400 (asset)

B. ₦ 150 (asset)

C. ₦ 150 (liability)

D. ₦ 400 (liability)

30. The accounting principle which states that for every debit entry, there is a corresponding credit entry is recognized by

A. Realization concept

B. Entity concept

C. Going concern

D. Dual aspect concept

ANSWERS

31. Which of the following is not an accounting convention?

A. Materiality

B. Consistency

C. Business entity

D. Periodicity

32. In the absence of partnership agreement, profits and losses are shared

A. In the ratio of capitals

B. Equally

C. In the ratio of drawings

D. According to services rendered

33. Which of the following is credited to a partnership appropriation accounts?

A. Interest on capital

B. Interest on drawings

C. Partner’s salaries

D. Partner’s drawings

34. Which of the following formulae is used to calculate stock turnover rate?

A. ^sales/_{average stock}

B. ^{cost of sales}/_{average stock}

C. ^{cost of sales}/_{closing stock}

D. ^{cost of sales}/_{opening stock}

35. Which of the followingbases of accounting does not make allowance for depreciation?

A. Cash basis

B. Accrual basis

C. Matching basis

D. Commitment basis

ANSWERS

Use the following information to answer questions 36 to 38.

-----------------------------------------------₦

Premises -------------------------------100,000

Plant ---------------------------------------50,000

Fixtures -----------------------------------30,000

Stock ---------------------------------------20,000

Debtors ------------------------------------10,000

Cash ----------------------------------------10,000

Creditors ----------------------------------20,000

36. Total assets is

A. ₦ 240,000

B. ₦ 220,000

C. ₦ 200,000

D. ₦ 180,000

37. Current ratio is

A. 4:1

B. 3:1

C. 2:1

D. 1:1

38. Quick ratio is

A. 4:1

B. 3:1

C. 2:1

D. 1:1

39. Which of the following is not used for determining working capital?

A. Cash

B. Debtors

C. Motor vehicles

D. Overdraft

40. In the absence of partnership agreement, a loan by a partner attracts interest at

A. 20%

B. 15%

C. 10%

D. 5%

ANSWERS

41. Which of the following is not a data processing method?

A. Manual

B. Mechanical

C. Electronic

D. Formatting

42. The correct sequence in data processing is

A. Input >>> process >>> output

B. Input >>>> output >>> process

C. Process >>> input >>> output

D. Process >>> output >>> input

Use the following information to answer question 43

Year -----------profit

2003 ---------Le 40,000

2004 ---------Le 48,000

2005 ---------Le 62,000

43. The value of goodwill calculated at 3 years purchase of annual profit is

A. Le 450,000

B. Le 150,000

C. Le 50,000

D. Le 48,000

44. The maximum amount which a company is allowed to raise through the sale of shares is

A. Authorized capital

B. Paid-up capital

C. Issued capital

D. Working capital

45. The double entry in the books to write off goodwill is

Debit Goodwill account, credit Capital Account

Debit Goodwill account, credit Revaluation account

Debit Profit and Loss Appropriation account, credit Goodwill account

Debit Trading account, credit Goodwill account

ANSWERS

46. Holders of ordinary shares do not have the right to

A. Participate in additional issue of shares

B. Vote at annual general meetings

C. Elect the board of directors

D. Receive dividends at a predetermined rate

47. Which of the following is not a real account?

A. Buildings account

B. Motor vehicles account

C. Patents account

D. Furniture account

48. An example of capital gain is

A. Premium

B. Bonus

C. Shares

D. Debenture

49. Which of the following attracts a fixed rate of dividend?

A. Ordinary shares

B. Founders’ shares

C. Preference shares

D. Deferred shares

50. Which of the following is a source of revenue to a local government authority?

A. Poll tax

B. duty

C. PAYE tax

D. Value Added Tax

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Candle Light To The World

FINANCIAL ACCOUNTING

WASSCE 2007

Objectives

copyright:ensoft2024. company@en-soft.com Phone:2347072716127

ensofts

Candle Light To The World

FINANCIAL ACCOUNTING

WASSCE 2007Objectives

copyright:ensoft2024. company@en-soft.com Phone:2347072716127

WASSCE 2007

Objectives