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FINANCIAL ACCOUNTING


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THEORY QUESTIONS
WAEC SYLLABUS

WASSCE 2010

Objectives



1. Which of the following is not an external user of accounting information?

A. Management

B. Creditors

C. Shareholders

D. Government


2. A trial balance is prepared to

A. Detect fraud

B. Ascertain losses in a trading period

C. Determine opening capital

D. Test arithmetic accuracy of ledge entries


3. Which of the following is the reason why a seller allows a customer cash discount?

A. Agreement to become a regular customer

B. Introducing a new customer to the seller

C. Settlement of account within a stated period

D. Placing a large order


4. A ledger is a

A. Principal book of accounts

B. Book of original entry

C. Record of credit transactions

D. Summary of entries


5. Which of the following is not found in a trial balance?

A. Opening stock

B. Closing stock

C. Capital

D. Rent paid


ANSWERS

Use the following information to answer questions 6 to 8.


Jan. 1 --------------------------------------------------------------------₦

1/1/08 Capital introduced by cash ---------------------------50,000

2/1/08 Bought goods for retail by cash --------------------10,000

3/1/08 Bought fixtures by cash ---------------------------------5,000

4/1/08 Sold goods to Lagbaja on credit ----------------------3,000

5/1/08 Bought goods on credit from Tamedu --------------8,000


6. Cash balance as at 5/1/08 is

A. ₦ 50,000

B. ₦ 40,000

C. ₦ 35,000

D. ₦ 30,000


7. Balance in Purchases Account at 5/1/08 is

A. ₦ 23,000

B. ₦18,000

C. ₦10,000

D. ₦ 8,000


8. Balance in the Capital account at 5/1/08 is

A. ₦ 60,000

B. ₦ 50,000

C. ₦ 35,000

D. ₦ 5,000


9. A Suspense Account is used to

A. Correct errors

B. Record errors detected until corrected

C. Prepare the balance sheet

D. Extract the trial balance


10. Which of the following is added to the proprietor’s capital?

A. Net profit

B. Gross profit

C. Net sales

D. Gross sales


ANSWERS

11. Where a wrong figure occurs in only one account with the second figure correctly stated, this is an error of

A. Transposition

B. Compensation

C. Omission

D. Commission


12. A temporary difference in the Trial Balance totals is kept in the

A. Adjustment Account

B. Suspense Account

C. Imprest Account

D. Appropriation Account


13. In the preparation of bank reconciliation statement, uncredited cheques are

A. Added to the balance as per bank statement

B. Deducted from the balance as per bank statement

C. Added to the balance as per cash book

D. Ignored totally


14. Which of the following is found in the general ledger?

A. Capital accounts

B. Sales accounts

C. Loan accounts

D. Drawings accounts


Use the following information to answer questions 15 and 16.


1/1/06 Debtor --------------------------------------------------------------D 2,600

1/1/06 Provision for bad debts --------------------------------------D 60

11/12/06 Bad debts ------------------------------------------------------D 60

1/12/06 New provision for bad debts is 5% of debtors


15. What is the amount for the new provision for bad debts?

A. D 130

B. D 127

C. D 124

D. D 120


ANSWERS

16. The provision for bad debts in the profit and loss account is

A. D 187

B. D 127

C. D 67

D. D 60


17. The balance in the Sales Ledger Control Account indicates the

A. Difference between debtors and creditors

B. Total sales

C. Total purchases

D. Total debtors


18. Sales was D 12,500, total expenses was D 2,500 and net profit is 10% of sales. What is the gross profit?

A. D 11,250

B. D 8,750

C. D 3,750

D. D 1,250


19. Which of the following is the equivalent of the Receipts and Payments Account?

A. Income and Expenditure Accounts

B. Cash Book

C. Subscriptions Account

D. Profit and Loss Account


20. Subscriptions received in advance are

A. Included in the Income and Expenditure Account

B. Not included in the Receipts and Payments account

C. Shown as a current asset in the Balance Sheet

D. Shown in the Balance Sheet as a current liability


ANSWERS

21. Where records maintained are inadequate to facilitate the preparation of a trading and profit and loss Accounts, this is described as

A. Cost accounting

B. Book – keeping

C. Incomplete records

D. Double entry


Use the following information to answer questions 22 to 24.


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

Opening stock of raw materials ------------------------------------------24,750

Purchases of raw materials ----------------------------------------------123,640

Carriage on raw materials --------------------------------------------------10,000

Closing stock of raw materials -------------------------------------------45,000

Factory supervisor’s salary -----------------------------------------------30,000

Wages of factory hands ----------------------------------------------------50,000

Royalties paid -----------------------------------------------------------------18,000

Insurance of factory ---------------------------------------------------------62,000

Work-in-progress (opening) ----------------------------------------------23,000

Raw material returned ------------------------------------------------------12,200


22. The value of raw material consumed is

A. ₦ 121,440

B. ₦ 113,390

C. ₦ 111,190

D. ₦ 101,190


23. The prime cost is

A. ₦ 199,190

B. ₦ 169,190

C. ₦ 151,190

D. ₦ 146,190


24. The total overhead expenses is

A. ₦ 142,000

B. ₦ 115,000

C. ₦ 110,000

D. ₦ 92,000


25. Bad debts written off is shown as

A. Debit in the sales ledger

B. Debit in the purchases ledger

C. Credit in the sales ledger

D. Credit in the purchases ledger


ANSWERS

26. The balance of the sales ledger control account represents

A. Total sales

B. Total credit sales

C. Total creditors

D. Total debtors


27. The accounting principle that states that insignificant expenditures are not to be taken into account is the

A. Realization concept

B. Materiality convention

C. Marching concept

D. Consistency convention


28. Which of the following transactions will increase the working capital of a business?

A. Payment in cash to a creditor

B. Payment by a cheque to a creditor

C. Sale of fixed asset in cash

D. Cash received from debtors


29. The realization concept states that

A. Revenue is recognized as being earned when ownership of goods passes to the customer

B. Revenue and profit should not be anticipated

C. Similar items should be accounted for in a similar way from one accounting period to another

D. Transactions must be expressed in monetary terms


30. Where fixed capital are maintained, partners’ drawings are transferred to the

A. Credit of Cap Accounts

B. Debit of Capital Accounts

C. Credit of Partners’ Current Accounts

D. Debit of Partners’ Current Accounts


ANSWERS

31. The method that provides a reliable check upon cash and stock at the branch and discloses the gross profit in the account is

A. Cost plus percentage

B. Cost price

C. Average cost

D. Selling price


32. A partner whose liability goes beyond his capital is known as

A. Dormant partner

B. Limited partner

C. General partner

D. Nominal partner


Use the following information to answer questions 33 to 35.





33. Aba’s share of profit is

A. ¢ 21,504

B. ¢ 19,792

C. ¢ 18,352

D. ¢ 18,080


34. Baba’s share of profit is

A. ¢ 16,128

B. ¢ 14,844

C. ¢ 13,764

D. ¢ 13,560


35. The rate of interest on capital is

A. 15%

B. 10%

C. 8%

D. 5%


ANSWERS

36. Carriage inwards is shown on the

A. Debit side of the trading account

B. Credit side of the trading account

C. Credit side of the profit and loss account

D. Debit side of the profit and loss account


37. An expense is termed an ‘accrual’ because it

A. Is yet to be paid for

B. Is a profit and loss account item

C. Must appear in the balance sheet

D. Is a trading account item


38. The accounting information treatment when goods are sent to branch at cost is debit Branch Stock Account and credit

A. Branch Stock Adjustment Account

B. Goods Sent to Branch Account

C. Branch Debt Account

D. Branch Profit and Loss Account


39. The document prepared for the disbursement of government fund is

A. An invoice

B. A receipt

C. A payment voucher

D. A bill


40. A financial plan of action expressed in monetary terms is a/an

A. Warrant

B. Budget

C. Impress

D. Consolidated fund


ANSWERS

41. Which of the following reserves is not used for bonus shares?

A. Revaluation reserve

B. Share premium

C. Capital redemption reserve fund

D. General reserve


42. The accounting concept which assumes that the business will continue to be in existence into the foreseeable future is

A. Dual aspect

B. Business entity

C. Accrual

D. Going concern


43. When shares are sold ‘at par’ it means that they are issued at

A. The market value

B. The nominal value

C. A discount

D. A premium


44. Which of the following does not form part of shareholders fund?

A. Ordinary shares

B. Share premium

C. Profit

D. Debenture


Use the following information to answer questions 45 and 46.


On 1/7/07, a trader owed wages of Le 2,000. During the year ended 30/6/08, wages of Le 2,400 were owed and Le 8,000 were paid.


45. The wages of the year ended 30/6/08 is

A. Le 12,400

B. Le 8,400

C. Le 8,000

D. Le 7,600


ANSWERS

46. Wages recorded in the balance sheet as at 30/6/08 is

A. Le 8,000

B. Le 6,000

C. Le 2,400

D. Le 2,000


47. The collection and organization of data is

A. Accounting process

B. Central processing

C. Data processing

D. Data manipulation


48. Money received from a customer is recorded in the customer’s account and bank account the accounting concept applied is

A. Business entity

B. Dual aspect

C. Going concern

D. Money measurement


49. The amount for which a business is sold is the

A. Goodwill

B. Consolidated fund

C. Purchase considerations

D. Capital reserve


50. Which of the following is a prime cost?

A. Royalty

B. Salary

C. Commission

D. Discounts allowed



WASSCE JUNE 2010 FINANCIAL ACCOUNTING OBJECTIVE TEST

ANSWERS

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


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