enwaecfinaccounts2009

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THEORY QUESTIONS

WAEC SYLLABUS

1. Which of the following books of original entry is used to record all payments and receipts by cash or cheque?

A. Sales Day Book

B. Cash Book

C. Purchases Day Book

D. General journal

2. As a basis for assessing future usage, fixed assets are shown at

A. Selling price

B. Cost price

C. Cost plus residual value

D. Net book value

3. In the absence of an agreement, partners share profits

A. Based on activeness of a partner

B. Based on capital contribution

C. On patronage basis

D. On equal basis

4. Subscriptions prepaid by members is recorded in the Balance Sheet for a Club as a

A. Current liabilities

B. Current asset

C. Fixed asset

D. Long term liability

5. The reduction in value of an intangible asset is

A. Depletion

B. Depreciation

C. Amortization

C. Appreciation

ANSWERS

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

A. Wages of operators

B. Factory power

C. Advertising

C. Cost of raw materials

7. Rent is apportioned to each department on the basis of

A. Area or space occupied

B. Equality

C. Turnover

D. Purchases

8. A document which acknowledges that a company owes a person a stated sum of money with an agreement to pay a fixed rate of interest periodically is

A. Share certificate

B. Allotment certificate

C. Preference certificate

D. Debenture certificate

Use the following information to answer questions 9 to 11.

----------------------------------------------------------------------------------D

Purchase of raw materials ------------------------------------------236,500

Returns of raw materials -----------------------------------------------4,750

Carriage of raw materials ---------------------------------------------34,000

Stock of raw materials at close -------------------------------------39,500

Factory fuel --------------------------------------------------------------150,000

Direct wages -------------------------------------------------------------205,000

Indirect wages ------------------------------------------------------------31,250

Factory power ----------------------------------------------------------105,000

Work-in-progress at start ---------------------------------------------32,500

9. What is the value of raw materials used?

A. D 270,500

B. D 265,750

C. D 236, 000

D. D 226,250

10. What is the prime cost?

A. D 717,500

B. D 431,250

C. D 286,250

D. D 270,500

ANSWERS

11. The total factory overhead is D 318, 750 D 286, 250 D 255, 000 D 236, 250

12. “Financial statements do not disclose all information users need to know about a firm”. This is the concept of Consistency Money measurement Dual aspect Materiality

13. Which of the following is not a source of revenue for local government? Mining royalties Radio and TV licenses Tenement/ Property rates Business permit fee

14. A difference between the debit and credit totals in a Trial Balance is placed in Bank reconciliation statement Profit and loss account Suspense account Appropriation account

15. A three column Cash Book contains columns for Cash, Assets and Liabilities Bank, Cash and Assets Cash, Bank and Returns Discount, Cash and Bank

ANSWERS

16. The total debtors account of a trading concern is ₦ 13,000. Out of this 2% is irrecoverable, 5% of the balance is not likely to be collected. What is the provision for doubtful debts?

A. ₦ 910

B. ₦ 650

C. ₦ 637

D. ₦ 260

17. Which of the following is not part of factory overhead?

A. Factory salaries

B. Factory lighting and heating

C. Depreciation of plant and machinery

D. Depreciation of fixtures and fittings

18. Cost of extension to a factory building is classified as

A. Capital receipt

B. Revenue expenditure

C. Capital expenditure

D. Revenue receipt

19. Which of the following does not appear in a bank statement?

A. Dividend received

B. Bank charges

C. Uncredited cheques

D. Dishonored cheques

20. The purchase of a typewriter for office use for ¢ 2,000 is debited to

A. Creditors

B. Bank account

C. Purchases account

D. Equipment account

ANSWERS

21. The document making a public offer for the sale of a company’s share is

A. Memorandum of Association

B. Articles of Association

C. Prospectus

D. Certificate of Registration

22. Programs installed in computers to facilitate processing of data are

A. Hardwares

B. Software

C. Magnetic taps

D. Diskettes

23. In a not for profit making organization, the excess of income over expenditure is

A. Added to capital

B. Added to accumulated fund

C. Deducted from capital

D. Deducted from accumulated fund

Use the following information to answer questions 24 to 26.

The authorizes capital of City Entertainment Company is made up of 200,000 2□(1/2)% preference shares Le 60 each and 300,000 ordinary shares of Le 20.80% of the ordinary shares have been issued at Le 30 each and fully paid. All the preference shares have been issued at par and fully paid. The directors decided to pay the preference dividend and recommended ordinary dividend of Le 0.10 share.

24. What is the amount of preference payable for the year?

A. Le 600,000

B. Le 500,000

C. Le 300,000

D. Le 5,000

25. What is the amount of the share premium?

A. Le 9,000,000

B. Le 5,000,000

C. Le 3,000,000

D. Le 2,400,000

ANSWERS

26. The value of the ordinary share capital to be stated in the balance sheet is

A. Le 9,000,000

B. Le 7,200,000

C. Le 4,800,000

D. Le 4,000,000

27. The petty cash book has

A. A debit balance only

B. A credit balance

C. A nil balance only

D. Both debit and credit balances

28. Credit sales was debited to A. Akpan instead of B. Akpan. This is an error of

A. Principle

B. Original entry

C. Omission

D. Commission

Use the following to answer questions 29 and 30.

A motor car costing D 100,000 was depreciated at 20% per annum by the diminishing balance method. Two years later, it was sold for D 60,000.

29. The net profit or loss on the sale was

A. D 40,000 profit

B. D 4,000 profit

C. D 4,000 loss

D. D 40,000 loss

30. The net book value at the time of sales is

A. D 64,000

B. D 60,000

C. D 40,000

D. D 36,000

ANSWERS

31. A service which a firm has enjoyed, but which has not yet been paid for is

A. Accrued expense

B. Preliminary expense

C. Prepaid expense

D. Overhead expense

32. Which of the following is not part of the double entry system?

A. Trading account

B. Profit and loss account

C. Appropriation account

D. Balance sheet

33. In the balance sheet, the balance on the Provision for Depreciation Account is shown as

A. Addition to fixed assets

B. Deduction from fixed assets

C. Addition to capital

D. Deduction from current liabilities

34. S. Sule sets aside from his private funds ₦ 20,000 for business purposes. The ₦ 20,000 is referred to as

A. Drawings

B. Capital

C. Loan

D. Profit

35. An article costs ₦ 1,800 and is sold at a gross profit of 20% on selling price. What is the selling price?

A. ₦ 2,250

B. ₦ 2,160

C. ₦ 1,800

D. ₦ 1,440

ANSWERS

36. Which of the following are personal accounts? I Wages II Debtors III Creditors IV Building

A. I, II and III only

B. II and III only

C. II and IV only

D. III and IV only

37. Prepayment is treated in the balance sheet of a firm as a

A. Fixed asset

B. Long-term liability

C. Current asset

D. Current liability

38. Which of the following is found in a Sales Ledger Account?

A. Credit purchases

B. Bill payable

C. Discount received

D. Discount allowed

39. The authority of the Accountant- General to disburse form government fund is

A. Provision

B. Warrant

C. Vote

D. Estimate

Use the following information to answer question 40

ANSWERS

41. The depreciation on plant acquired by a manufacturing company is treated as

A. Prime cost

B. Administrative expenses

C. Factory overhead

D. Selling and distribution expenses

42. As evidence of payment to a government treasury, revenue collectors issue

A. Treasury card

B. Receipt voucher card

C. Treasury receipt

D. Payment voucher

43. Hardware in data processing refers to

A. Programs run on the computer

B. Entry and store information on the computer

C. Microsoft disc operating system

D. Mechanical components of the computer

44. Which of the following is a self-balancing account?

A. Trading account

B. Appropriation account

C. Assets account

D. Control account

45. A medium of imputing data into the computer is through the use of the

A. Keyboard

B. Monitor

C. Software

D.Hardware

ANSWERS

46. Which of the following is debited to partner’s current account?

A. Capital

B. Interest on capital

C. Drawings

D. Share of profit

Use the information to answer questions 47 and 48.

Abu, a debtor to Dania, owed ¢ 10,500 at the start of the month. He paid cash of ¢ 40,005 during the month and received additional credit sales of ¢ 20,000.

47. Abu’s balance at the end of the month is

A. ¢ 30,505 cr.

B. ¢ 9,505 cr.

C. ¢ 9,505 dr.

D. ¢ 30,500 dr.

48. In Dania’s books, to record the payment of ¢40,005 by Abu

A. Debit Cash account, credit Abu’s account

B. Debit Abu’s account, credit Cash Account

C. Debit Cash Account, credit Sales Account

D. Debit Sales Account, credit Cash Account

49. A debenture holder is a

A. Creditor