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FINANCIAL ACCOUNTING


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THEORY QUESTIONS
WAEC SYLLABUS

WASSCE 2012

Objectives



1. The objective of accounting information is to enable users to

A. Prepare the financial statements

B. Value stock

C. Make decisions

D. Prepare budgets


2. Trade discounts are given for

A. Bulk purchases

B. Prompt payment

C. Quick delivery

D. Cash payment


3. When closing stock is overstated, it would reduce

A. Cost of sales and increase gross profit

B. Gross profit and increase cost of sales

C. Purchases and increase sales

D. Sales and increase purchases


4. Which of the following is not a source document?

A. Journal proper

B. Sales invoice

C. Debit note

D. Credit note


5. A fixed asset fully written-down by a trader is now considered to be worth ₦ 5,000. The double entry required to effect this is: debit

A. Asset account credit Purchase account

B. Asset account credit Capital account

C. Capital account credit Asset account

D. Capital account credit Profit and Loss account


ANSWERS

6. Which of the following is a book of original entry?

A. Ledger

B. Balance Sheet

C. Bank Statement

D. Sales journal


7. A Balance Sheet shows only

A. Fixed assets and current assets

B. Assets and long term liabilities

C. Assets and liabilities

D. Assets and capital


8. The process of entering transaction from one book to another is

A. Reading

B. Posting

C. Numbering

D. Listing


Use the following information to answer questions 9 and 10.


-------------------------------------------------------1/1/10 -----------------31/12/10

-------------------------------------------------------GH¢ --------------------GH¢

Stocks --------------------------------------------1,400 ------------------1,900

Creditors -----------------------------------------2,000 ------------------2,700

Cash paid to trade creditors GH¢ 8,000

Mark-up on cost of sales 20%


9. The total purchases is

A. GH¢ 8,700

B. GH¢ 7,300

C. GH¢ 6,000

D. GH¢ 5,300


10. The cost of sales is

A. GH¢ 8,200

B. GH¢ 6,800

C. GH¢ 5,500

D. GH¢ 4,800


ANSWERS

11. Which of the following is a Trading Account item?

A. Discounts allowed

B. Discounts received

C. Carriage outwards

D. Carriage inwards


12. The addition of prime cost and factory overheads is

A. Total factory overheads

B. On sales of stock in trade

C. From trade debtor

D. From trading activities


13. Capital receipt is collected

A. On sales of motor vehicle

B. On sales of stock in trade

C. From trade debtor

D. From trading activities


14. Which of the following is an example of factory overheads?

A. Salary of marketing officer

B. Salary of production officer

C. Salary of accounting officer

D. Wages of machine operator


15. Osa started business with Le 40,000 cash. The accounting entry is debit

A. Cash account credit Capital account

B. Capital account credit Cash account

C. Purchases account credit Cash account

D. Expenses account credit Capital account


ANSWERS

16. Branch stock account is used to determine the

A. Net value of goods sent to branch

B. Gross profit of the branch

C. Branch credit sales

D. Branch net profit or loss


17. The name given to a budget in public service accounting is

A. Vote

B. Subvention

C. General order

D. Estimate


Use the following information to answer questions 18 to20.


Balance Sheet as at 31st December, 2010





18. The amount of working capital is

A. ₦ 11,000

B. ₦ 7,000

C. ₦ 4,000

D. ₦ 3,000


19. Working capital ratio is

A. 5:4

B. 5:3

C. 4:5

D. 1:1


20. Acid test ratio is

A. 5:4

B. 5:3

C. 4:5

D. 1:1


ANSWERS

21. Which of the following is not prepared by a partnership?

A. Trading account

B. Profit and loss account

C. Income and expenditure account

D. Profit and Loss Appropriation account


22. A partner who only makes capital contribution but does not take part in the management of the partnership business is a/an

A. Ordinary partner

B. Limited partner

C. Dormant partner

D. Nominal partner


23. Which of the following is component of prime cost?

A. Depreciation

B. Royalty

C. Factory rent

D. Factory electricity


24. The concept which establishes the rule for the periodic recognition of revenue as soon as it is capable of objective measurement is

A. Going concern

B. Entity

C. Consistency

D. Realization


25. Rent accrued in 2009 was D140. In 2010, D900 was paid while D160 was outstanding. Rent for 2010 was

A. D 1,200

B. D 1,060

C. D 920

D. D 880


ANSWERS

26. Which of the following is not an input device?

A. Card reader

B. Paper top reader

C. Alpha-numeric keyboard

D. Line printer


27. The equivalent of Income and Expenditure Account in a trading concern is

A. Trading account

B. Profit and Loss account

C. Appropriation account

D. Balance Sheet


28. The term used to denote the capital of a not-for-profit making organization is

A. Annuity fund

B. Nominal capital

C. Circulating capital

D. Accumulated fund


29. The portion of authorized capital that has been allotted to the subscribers is

A. Called up capital

B. Paid up capital

C. Issued capital

D. Nominal capital


30. Partners whose liabilities are restricted to their financial contribution to the partnership in the event of winding up are

A. Ordinary partners

B. Limited partners

C. Dormant partners

D. Sleeping partners


ANSWERS

31. If creditors at 1/1/10 were Le 3,000 creditors at 31/12/10 Le 5,500 and payments to creditors Le 29,000. The purchases figure for 2010 is

A. Le 34,500

B. Le 32,000

C. Le 31,500

D. Le 26,500


32. Which of the following is not found in the personal ledger?

A. Debtors account

B. Creditors account

C. Capital account

D. Nominal account


33. The Sales ledger Control Account is also referred to as

A. Bought Ledger Control Account

B. Purchases Account

C. Total Debtors Account

D. Total Creditors Account


Use the following information to answer questions 34 and 35.


The Health Department of Zango Local Government incurred the following expenditure in 2010. Le Construction of hospital wards 300,000 Purchase of hospital beds 40,000 Salaries and wages 80,000 Purchase of drugs 55,000 Purchase of X-ray machines 150,000


34. Capital expenditure for the year was

A. Le 545,000

B. Le 490,000

C. Le 450,000

D. Le 300,000


35. The amount of recurrent expenditure was

A. Le 245,000

B. Le 175,000

C. Le 135,000

D. Le 80,000


ANSWERS

36. An increase in the provision for doubtful debts results in a/an

A. Increase in the gross profit

B. Decrease in the gross profit

C. Decrease in the net profit

D. Increase in the net profit


37. Which of the following errors affect the agreement of a Trial Balance?

A. Wrong addition in the sales account

B. Crediting a purchase to a Tambi’s account instead of F. Tambi’s account

C. Failure to enter sales in the books

D. Posting the purchase of a van to the debit side of the purchases account


38. The excess of the value of assets over the purchase consideration on acquisition of a business is credited to

A. Share capital account

B. Goodwill account

C. Capital reserve account

D. General reserve account


39. Shares of ₦ 3 nominal value were issued at a price of ₦ 4. The difference of ₦1 is a

A. Commission

B. Discount

C. Premium

D. Bonus


40. Which of the following is not the purpose of control account?

A. Check on errors of addition

B. Locate errors

C. Locate missing figures

D. Monitor the cash book


ANSWERS

41. Which of the following is not part of the Central Processing Unit of a computer?

A. Arithmetical and logical unit

B. Memory unit

C. Input unit

D. Control unit


42. The double entry to record the proceeds on disposal of assets is debit

A. Bank Account credit Asset Disposal Account

B. Asset Disposal Account credit Bank Account

C. Provision for Depreciation Account credit Asset Disposal Account

D. Asset Disposal Account credit Provision for Depreciation Account


43. An underwriter for a company’s share is paid

A. Interest

B. Commission

C. Dividend

D. Salary


44. Which of the following is found in a Memorandum of Association?

A. Names of directors

B. Appointment of directors

C. Object of the business

D. Payment of dividend


45. Administrative, selling and distribution expenses in a manufacturing firm are recorded in

A. Trading account

B. Manufacturing account

C. Profit and Loss account

D. Balance sheet


ANSWERS

46. Which of the following is not a revenue to a Local Government?

A. Fines

B. Licenses

C. Personal Income tax

D. Tenement rates


Use the following information to answer questions 47and 48.


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

Cash in hand ------------------------------------------------------------1,440

Cash at bank ------------------------------------------------------------2,440

Stock ----------------------------------------------------------------------2,500

Furniture and fittings ------------------------------------------------2,200

Creditors -----------------------------------------------------------------1,000


47. The capital is

A. D 7,580

B. D 6,580

C. D 5,380

D. D 1,000


48. The liability is

A. D 7,580

B. D 6,580

C. D 5,380

D. D 1,000


49. Which of the following is not an item in the profit and loss account?

A. Drawings

B. Interest

C. Balances

D. Bad debts


50. A loss made on the disposal of a fixed asset is debited to

A. Sales Account

B. Purchases Account

C. Profit and Loss Account

D. Capital Account



WASSCE JUNE 2012 FINANCIAL ACCOUNTING OBJECTIVE TEST

ANSWERS

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


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