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FINANCIAL ACCOUNTING


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THEORY QUESTIONS
WAEC SYLLABUS

WASSCE 2013

Objectives



1. The distinguishing feature between a two-column and three-column cash book is

A. Discount column

B. Cash column

C. Bank column

D. Ledger folio


2. The lodgment of business cash into the business bank account is an example of

A. Contra entry

B. Bank reconciliation

C. Self-balancing ledger

D. Reversal entry


3. A credit balance is

A. A liability or an expense

B. A liability or an income

C. An expenditure or an income

D. As asset or an expense


4. Which of the following is not a characteristic of a trial balance?

A. It has columns for debit and credit balances

B. Total of debit balance equals total of credit balance

C. It is a statement

D. It is an account


5. The capital of a sole trader changes as a result of

A. Paying wages by cash

B. Equipment purchased by cheque

C. Drawings by cheque

D. Purchases on credit


ANSWERS

6. The order of financial accounting process involves: I. Recording II. Presenting III. Collecting IV. Analyzing

A. I, II, III and IV

B. II, III, I and IV

C. III, I, II and IV

D. IV, III, II and I


7. A dishonouredcheque is

A. Debited in the cash book

B. Credited book in the cash book

C. Double entry in the cash book

D. Credited in the bank book


8. A petty cashier received a float of GH¢ 120 and spent GH¢ 84. The impress is

A. GH¢ 204

B. GH¢ 120

C. GH¢ 84

D. GH¢ 36


9. Which of the following is not a book of original entry?

A. Cash book

B. Purchases ledger

C. Returns outwards journal

D. General journal

Use the following information to answer questions 10 to 12.


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

Net profit -----------------------------------------------------------------60,000

Total assets ------------------------------------------------------------520,000

Current liabilities -----------------------------------------------------150,000

Current assets --------------------------------------------------------280,000


10. The current ratio is

A. 1.87: 1

B. 1: 1.87

C. 1: 2

D. 2: 1


ANSWERS

11. The capital employed is

A. ₦740,000

B. ₦580,000

C. ₦370,000

D. ₦280,000


12. The returns on capital employed us

A. 17.2%

B. 16.2%

C. 15.2%

D. 11.2%


13. The double entry principle states that

A. Every debit entry must have a corresponding credit entry

B. Every credit entry must have a corresponding double entry

C. Every debit entry must have a corresponding double entry

D. Every asset must have a corresponding liability


14. Which of the following is a nominal account?

A. Machinery account

B. Drawings account

C. Debtors account

D. Wages account


15. Reserves account is kept in the

A. Private ledger

B. Creditors ledger

C. Nominal ledger

D. Debtors ledger


ANSWERS

16. An advantage of control account is

A. Locating figures

B. Adding figures

C. Changing figures

D. Locating errors


17. The accumulated fund of a not-for-profit making organization is

A. A fixed asset

B. A current asset

C. A liability

D. Capital


18. A business is treated as being separate from the owners. This statement is emphasized by

A. Consistency concept

B. Realization concept

C. Going concern concept

D. Business entity concept


19. Which of the following is recorded on the debit side of the trial balance?

A. Bank overdraft

B. Returns outwards

C. Purchases

D. Capital


Use the following information to answer questions 20 and 21.


----------------------------------------------------------------------1/6/2011 ---------------------30/5/2012

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

Creditors ------------------------------------------------------2,495 --------------------------2,285

Debtors --------------------------------------------------------1,215 --------------------------2,145

Cash paid to creditors --------------------------------------- -----------------------------32,170

Cash received from customers --------------------------- -----------------------------40,650

Goods returned to suppliers ------------------------------ ----------------------------------500


20. Purchases for the year is

A. D 32,880

B. D 32,780

C. D 32,460

D. D 31,960


ANSWERS

21. Sales for the year is

A. D 42,795

B. D 42,080

C. D 41,580

D. D 39,720


22. Which of the following is determined in the Trading Account?

A. Factory overheads

B. Cost of goods sold

C. Prime cost

D. Net profit


23. Cash receipts and payments involving discounts are entered in

A. Three-column cash book

B. Two-column cash book

C. Analytical cash book

D. Petty cash book


24. The minimum number of persons required to form a partnership business is

A. 2

B. 3

C. 5

D. 10


25. Which of the following accounts has a credit balance?

A. Returns inwards account

B. Machinery account

C. Sales account

D. Cash account


ANSWERS

26. The accounting principle that states that, in the preparation of accounting statement, revenue are recognized as soon as goods are passed on to the customer is the

A. Materiality concept

B. Matching concept

C. Consistency concept

D. Realization concept


27. Agreement between partners is contained in the Partnership

A. Act

B. Deed

C. Accord

D. Deal


28. A low current ratio in a business indicates that the business is

A. Faced with long term loan repayment problem

B. Efficient in the utilization of its resources

C. Unable to pay its bills on time

D. Growing its net assets effectively


29. Which of the following is a recurrent expenditure in public sector accounting?

A. Purchase of vehicles

B. Purchase of drugs

C. Construction of boreholes

D. Construction of buildings


30. In departmental accounts, administrative expenses are recorded in the

A. Trading Account

B. Balance Sheet

C. Profit and Loss Account

D. Profit and Loss Appropriation Account


ANSWERS

31. The Public Accounts Committee is an organ of

A. Military regime

B. Parliament

C. Presidency

D. Councilors


Use the following information to answer questions 32 and 33.


--------------------------------------------------------------------------------------Le

Fines ----------------------------------------------------------------------------20,000

Market rates -----------------------------------------------------------------120,000

Salaries -------------------------------------------------------------------------60,000

Maintenance of vehicles --------------------------------------------------49,000

Park collections ------------------------------------------------------------100,000


32. The balance at the end of the period is

A. Le 270,000

B. Le 139,000

C. Le 131,000

D. Le 120,000


33. The total expenditure for the period is

A. Le 319,000

B. Le 270,000

C. Le 139,000

D. Le 109,000


34. Which of the following is not an item on the credit side of the purchases ledger control account?

A. Cash received

B. Cash payment

C. Contra settlement

D. Cheque payment


35. When a business is purchased from a sole trader, the excess of the purchase price over the net assets is

A. Reserve

B. Goodwill

C. Freehold

D. Valuation price


ANSWERS

36. A set of instructions or programs which controls the operation of a computer is

A. Reproduction

B. Debugging

C. Monitor

D. Keyboard


37. The process of detecting, tracing and eliminating errors in a computer program is

A. Reproduction

B. Debugging

C. Sorting

D. Retrieving


38. In a not-for-profit making organization, the cash book is referred to as

A. Income and expenditure account

B. Receipts and payments accounts

C. Two column cash book

D. Petty cash book


39. When the going concern concept is no longer applicable, the fixed assets are recorded at their

A. Net book value

B. Realizable value

C. Gross value

D. Revalued amount


Use the following information to answer questions 40 and 41.


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

Stock of raw materials ---------------------------------------1/1/09 ------------------5,000

Stock of raw materials ------------------------------------31/12/09 ------------------5,500

Purchase of raw materials ------------------------------------------------------------50,000

Carriage inwards --------------------------------------------------------------------------3,000

Direct labour ------------------------------------------------------------------------------12,000

Factory overhead ------------------------------------------------------------------------17,500


40. THE cost of raw materials consumed is

A. GH¢ 58,000

B. GH¢ 52,500

C. GH¢ 52,000

D. GH¢ 50,000


ANSWERS

41. The prime cost is

A. GH¢ 64,500

B. GH¢ 64,000

C. GH¢ 58,500

D. GH¢ 52,500


42. Which of the following relates to the essence of partnership? To

A. Run a charity organization

B. Pursue a social objective

C. Form a business for profit

D. Run a religious objective


43. The basic assumption which underlines the preparation of periodic financial statements is known as accounting

A. Bases

B. Techniques

C. Concepts

D. Method


44. Upon the dissolution of a partnership business, the part to be settled first out of the proceeds realized is

A. Unsecured creditors

B. Partner’s loan and advances

C. Secured creditors

D. Partner’s account


45. Stock account is a type of

A. Nominal account

B. Personal account

C. Real account

D. Fixed assets account


ANSWERS

46. At the end of a trading period, cost of goods sold is debited to the trading account while cost of services is debited to the

A. Balance sheet

B. Manufacturing account

C. Trading account

D. Profit and loss account


47. Which of the following is not part of prime cost of production?

A. Depreciation of factory equipment

B. Direct expenses

C. Direct wages

D. Carriage on raw materials


48. Excess of current assets over current liabilities is

A. Deferred capital

B. Nominal capital

C. Working capital

D. Authorized capital


49. A statement showing a trader’s financial position as at a particular date is a/an

A. Trading account

B. Profit and loss account

C. Balance sheet

D. Appropriation account


50. A trading account is prepared to disclose the

A. Net profit or loss for the year

B. Gross profit or loss for the year

C. Accumulated fund for the year

D. Gross profit on manufacturing



WASSCE JUNE 2014 FINANCIAL ACCOUNTING OBJECTIVE TEST

ANSWERS

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


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