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FINANCIAL ACCOUNTING


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THEORY QUESTIONS
WAEC SYLLABUS

WASSCE 2008

Objectives



1. Which of the following is the basic accounting equation?

A. Assets = Capital + Liabilities

B. Capital = Assets + Liabilities

C. Liabilities = Assets + Capital

D. Assets = Liabilities – Equity


2. A Sales Day Book is used for recording

A. Credit sales

B. Sales returns

C. Hire purchase

D. Cash sales


3. An analytical cash book is used to

A. Indicate sources of cash received

B. Categorize petty cash payment

C. Separate cash and bank balance

D. Analyze amounts due from debtors


4. Which of the following concepts is expected to hold when a proprietor makes a drawing of goods or cash from the business?

A. Business entity

B. Realization

C. Going concern

D. Dual aspect


5. In a partnership business, the net profit serves as opening figure for

A. Trading account

B. Profit and loss account

C. Current account

D. Appropriation account


ANSWERS

6. Which of the following is the effect of an increase in the provision for discount allowed?

A. Increase in net profit

B. Decrease in gross profit

C. Decrease in net profit

D. Increase in gross profit


7. In the preparation of manufacturing accounts prime cost plus factory overheads equal to cost of

A. Materials available

B. Production

C. Sales

D. Materials used


8. Returns inwards is also called

A. Purchases returns

B. Sales returns

C. Goods on sale or return

D. Goods in transit


Use the following information to answer questions 9 to 11.





9. The balance of the profit and loss appropriation account as at the end of the year was

A. ₦ 16,000

B. ₦ 10,000

C. ₦ 5,400

D. ₦1,400


10. The authorized capital of Tale Ltd is

A. ₦ 176,000

B. ₦ 166,000

C. ₦ 160,000

D. ₦ 16,000


ANSWERS

11. The dividend payable to preference shareholders is

A. ₦ 9,000

B. ₦ 6,000

C. ₦ 3,000

D. ₦ 2,400


12. Which of the following is not a characteristic of a computer?

A. Large storage capacity

B. Very fast

C. Highly accurate

D. Highly diligent


13. Final accounts of a not-for-profit making organization is made up of

A. Subscriptions account and income and expenditure accounts

B. Subscriptions accounts and balance sheet

C. Income and expenditure account and balance sheet

D. Receipts and payments account and income and expenditure account


14. Which of the following is a debit entry in debtors control account?

A. Credit sales

B. Bad debts

C. Returns inwards

D. Discounts allowed


Use the following information to answer questions 15 and 16.


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

Opening capital -------------------------------60,000

Drawings ------------------------------------------4,000

Cost of sales -----------------------------------50,000

General expenses ------------------------------7,000

Mark-up 50%


15. Net profit is

A. ₦ 43,000

B. ₦ 25,000

C. ₦ 23,000

D. ₦ 18,000


ANSWERS

16. Closing capital is

A. ₦ 81,000

B. ₦ 78,000

C. ₦ 74,000

D. ₦ 64,000


17. Which of the following is not found in a partnership balance sheet?

A. Capital

B. Drawings

C. Creditors

D. Bank balance


18. Which of the following is not a debit item in partners appropriation account?

A. Interest on capital

B. Salary

C. Share of profit

D. Share of loss


19. The difference between factory cost of goods produced and its market value is

A. Interest

B. Premium

C. Manufacturing profit

D. Manufacturing overhead


20. Which of the following is not an item in the appropriation account of a company?

A. General reserve

B. Company tax

C. Debenture interest

D. Goodwill written off


ANSWERS

21. The purchase of furniture, an asset to the company was debited to purchases account. This is an error of

A. Omission

B. Original entry

C. Principle

D. Commission


22. Which of the following terms is not to describe the total amount stated in the Memorandum of association approved by the Registrar of Companies?

A. Authorized capital

B. Registered capital

C. Issued capital

D. Nominal capital


23. A Cash payment of ₦ 85 to Regina was entered in the books as ₦ 58. The entries to correct the error are: debit

A. Regina’s account ₦ 27 credit Cash Account ₦ 1

B. Cash Account ₦ 27 credit Regina’s Account ₦ 27

C. Regina’s Account ₦ 143 credit Cash Account ₦ 143

D. Cash Account ₦ 143 credit Regina’s Account ₦ 143


Use the following information to answer questions 24 to 26.





24. The gross profit is

A. Le 47,200

B. Le 42,200

C. Le 37,200

D. Le 19,800


25. The net profit is

A. Le 42,200

B. Le 37,200

C. Le 32,700

D. Le 19,800


ANSWERS

26. The cost of goods sold is

A. Le 185,100

B. Le 139,200

C. Le 136,200

D. Le 131,200


27. The class of share to which payment of dividend depends on profit is

A. Forfeited shares

B. Ordinary shares

C. Bonus shares

D. Preference shares


28. Payment for shares in installments is done by means of

A. Calls

B. Circulars

C. Subscription

D. Invitation


29. Mark-up on goods sent to branch are recorded in the books by crediting

A. Stock Adjustment Account debiting Branch Stock Account

B. Goods sent to Branch Accounts debiting Branch Stock Account

C. Bank Stock Account debiting Stock Adjustment Account

D. Branch Stock Account credit Cash Account


30. Which of the following is not part of cost of production?

A. Direct material cost

B. Direct wages

C. Factory overheads

D. Administrative overheads


ANSWERS

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Use the following information to answer questions 31 and 32.





31. Recurrent expenditure is

A. D 180,000

B. D 164,000

C. D 150,000

D. D 30,000


32. Capital expenditure is

A. D 780,000

B. D 750,000

C. D 600,000

D. D 500,000


33. Which of the following is not a subsidiary book?

A. Sales journal

B. Cash book

C. Purchases ledger

D. General journal


34. In bank reconciliation, when a cash book shows a credit balance, uncredited cheques are: I. Deducted from the cash book balance II. Added to the bank statement balance III. Added to the cash book balance

A. I and II only

B. I, II and III

C. II and III only

D. III only


35. When provision is made for doubtful debt, the accounting entries are

A. Debit Profit and Loss account, credit provision for doubtful debt account

B. Debit debtors account credit trading account

C. Debit profit and loss account credit sales account

D. Debit trading account credit debtors account


ANSWERS

36. An approach for discovering missing figures in incomplete records is the use of

A. Cash book

B. Control accounts

C. Trading accounts

D. Balance sheet


37. A merchant paid ₦ 180,000 on rent for 18 months but charged ₦ 120,000 to profit and loss account for the year. The concept applied is

A. Rewarding the imprest holder

B. Reducing the burden of the petty cashier

C. Reimbursing the petty cashier regularly

D. Reducing the postings for small expenses into the main ledger


38.Which of the following is an advantage of the impress system?

A. Rewarding the impress holder

B. Reducing the burden of the petty cashier

C. Reimbursing the petty cashier regularly

D. Reducing the postings for small expenses into the main ledger.


Use the following information to answer questions 39 and 40.




ANSWERS

39. How much commission was apportioned to Department

A? A. ₦ 9,600

B. ₦ 3,600

C. ₦ 2,000

D. ₦ 1,600


40. Rent apportioned to Department B is

A. ₦ 4,000

B. ₦ 3,600

C. ₦ 2,000

D. ₦ 1,600



41. The entries to record goods bought for cash are: debit

A. Cash Account, credit Purchases Account

B. Purchases Account credit Cash Account

C. Purchases Account credit Stock Account

D. Purchases Account credit Goods Account


42. Carriage inwards is posted to

A. Trading account

B. Profit and Loss account

C. Appropriation account

D. Balance sheet


43. Repairs to air conditioners was debited to office equipment account. This is an error of

A. Principle

B. Commission

C. Original entry

D. Compensation


44. The practice of identifying with one constant approach where a number of approaches exist for solving an accounting problem is the convention of

A. Conservation

B. Consistency

C. Prudence

D. Materiality


Use the following information to answer questions 45 and 46.


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

Opening debtors ---------------------------40,000

Opening creditors -------------------------30,000

Credit sales --------------------------------100,000

Credit purchases --------------------------80,000

Bad debts --------------------------------------5,500

Set-offs ---------------------------------------65,500


45. Closing debtors figure is

A. ₦ 140,000

B. ₦ 134,500

C. ₦ 80,000

D. ₦ 69,000


ANSWERS

46. Closing creditors figure is

A. ₦ 115,500

B. ₦ 110,000

C. ₦ 95,500

D. ₦ 44,500


47. Which of the following is a nominal account?

A. Bank account

B. Cash account

C. Sales account

D. Stock account


48. Which of the following is a storage device?

A. Diskette

B. Keyboard

C. Printer

D. Monitor


49. Trade creditors’ personal accounts are found in the

A. Purchases ledger

B. Sales ledger

C. General ledger

D. Sales day book


50. Which of the following is not an instrument for controlling public expenditure?

A. Constitution

B. Financial regulation

C. Budget

D. Memorandum of Association



WASSCE JUNE 2008 FINANCIAL ACCOUNTING OBJECTIVE TEST

ANSWERS

​1. A 2. A 3. B 4. A 5. D 6. C 7. B 8. B 9. A 10. C 11. C 12. D 13. D 14. A 15. D 16. C 17. C 18. D 19. C 20. B 21. C 22. B 23. B 24. C 25. D 26. C 27. C 28. A 29. A 30. D 31. A 32. C 33. B 34. D 35. A 36. B 37. B 38. B 39. C 40. A 41. B 42. A 43. A 44. B 45. D 46. D 47. A 48. A 49. A 50. D


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