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FINANCIAL ACCOUNTING


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THEORY QUESTIONS
WAEC SYLLABUS

WASSCE 2018

Objectives



1. Investors in a business are mainly interested in the firm's

A. Liquidity.

B. Debt.

C. Management.

D. Profitability.


2. One of the characteristics of useful accounting information is

A. profitability.

B. comparability.

C. efficiency.

D. Liquidity.


3. Which of the following items is found on the debit side of a trial balance?

A. Provision for doubtful debts

B. Discount allowed

C. Discount received

D. Returns outwards


4. Which of the following transactions is a revenue expenditure?

A. Purchase of a plant

B. Purchase of a new engine

C. Construction of office wall

D. Purchase of fuel for vehicle


5. Credit notes received are source documents for

A. Returns Inwards Journal.

B. Return Outwards Journal.

C. Purchase Journal. D. Sales Journal.


ANSWERS

6. A document forwarded to a supplier showing amount due for unsatisfactory goods is

A. Debit Note.

B. Credit Note.

C. Invoice.

D. Waybill.


7. The claim of a proprietor of a business entity on its assets is

A. liabilities.

B. capital.

C. drawings.

D. funds.


8. The apportionment of cost of a fixed asset to the profit and loss account is termed as

A. expense.

B. depreciation.

C. loss.

D. appreciation.


9. Entries in the purchases journal are transferred to the

A. receivable ledger.

B. payable ledger.

C. general ledger.

D. private ledger.


10. A reduction in price to encourage prompt payment is

A. trade discount.

B. quantity discount.

C. cash discount.

D. seasonal discount.


Use the following information to answer questions 11 and 12.


ANSWERS

Tei Ltd offered 1,560 units of a magazine at N 60.00 each. Trade discount is 10% and cash discount is 10% within 30 days and 5% within 60 days.


11. The amount payable if payment is made on the 40th day is

A. N 88,920.

B. N 84,240.

C. N 80,028.

D. N 72,025.


12. The cash discount allowed on the 50th day is

A. N 9,360.

B. N 8,424.

C. N 4,680.

D. N 4,212.


13. An amount of Le 2000 received from a customer Kofi has been credited to another customer, Kofigo's account. This is an error of

A. Principle.

B. Commission.

C. Original entry.

D. Complete reversal.


14, Current assets less current liabilities is

A. Working capital.

B. Capital employed.

C. Fluctuating capital,

D. Fixed capital.


15. A debit balance of GHd 420 on the Purchases Ledger Control Account means that as at that date

A. Trade creditors have been overpaid by GHtf 420.

B. Trade creditors are owed GHd 420.

C. Goods returned to trade creditors amounted to GHd 420.

D. Total supplies from trade creditors amounted to GHd 420.


ANSWERS

16. Sales and Purchases ledgers are used in a business to keep records of

A. The owner's capital .and cash transactions.

B. Accounts of individual customer's and suppliers.

C. Current assets and fixed assets.

D. Current liabilities and long-term liabilities.


17. Which of the following activities will increase profits?

A. Depreciation charges

B. Reduction in provision for doubtful debts

C. Undervalued closing stock D. Returns inwards


18. The concept that implies that a business will operate for an indefinitely long period of time is

A. Accrual concept.

B. Going concern concept.

C. Business entity concept.

D. Periodicity concept.


19. The consistency concept aims at

A. Ensuring that all expenses are matched against revenue.

B. Reducing cost.

C. Comparability of accounting records.

D. Suppressing profits to be declared.


20. The concept which states that revenue is recognized when goods are sold is

A. Realisation concept.

B. Matching concept.

C. Periodicity concept.

D. Going concern concept.


ANSWERS

21. Cost of goods sold is calculated as

A. Opening stock + purchases-closing stock.

B. Opening stock + sales-closing stock.

C. Opening stock+ purchases + closing stock.

D. Opening stock + sales + closing stock.


22. The wages of an office cleaner is classified as

A. Direct labour cost.

B. Direct expenses.

C. Factory overheads.

D. Administrative overhead.


Use the following information to answer questions 23 and 24.


Le Sales 120,000

Purchases 100,000

Opening stock 10,00

Closing stock 20,0023.24.


23. The cost of goods sold is

A. Le 120,000.

B. Le 110,000

C. Le 90,000.

D. Le 30,000.


24. The gross profit or loss is

A. Le 30,000 gross profit.

B. Le 20,000 gross profit.

C. Le 10,000 gross loss.

D. Le 30,000 gross loss.


25. The amount set aside out of profit to strengthen the financial position of the business

A. provision.

B. reserve.

C. depreciation

D. surplus


ANSWERS

26. A fall in value of a fixed asset due to technoligical changes is described as

A. Superfluity

B. Wear and tear

C. Obseolescence

D. Depletion


27. A credit entry is made in the plant and Machinery Account for the A

A. Purchase of an additional plant and machinery

B. Sale of plant and machinery

C. Maintenance of plant and machinery

D. Appreciation of the plant and machinery


28. In a manufacturing account royalties paid is

A. Debited to the trading account

B. Credited to the profit and loss account

C. Credited to the manufacturing account

D. Debited to the manufacturing account


29. One of the component of factory overheads is

A. raw materials consumed

B. manufacturing wages

C. carriage inwards

D. depreciation of plant and machinery


Use the following information to answer questions 30 and 31.


Gild

Direct materials used 64,000

Direct labour 30,000

Production overheads 22,000

Work in progress at beginning 9.000

Work in progress at close 14.000


30. Total cost of production is

A. GIU 94,000

B. Gild 106,000

C. GHd 111,000

D. GHd 116,000


ANSWERS

31. Prime cost of production is

A. GHd 64,000

B. GHd 94,000

C. GHd 111,000

D. GHd 116,000


32. The balance on the sales ledger control account at the end of the accounting year represents total

A. Trade debtors at the end of the year

B. Cash sales for the year

C. Credit sales for the year

D. Amount transferred from the sales journal





33. Credit sales for 2016 is

A. D 530,000.

B. D 370,000.

C. D 350,000.

D. D 330,000.


34. Credit purchases for 2016 is

A. D 290,000.

B. D 230.000.

C.D 220.000.

D. D 210.000


35. The excess of assets over liabilities of a not-for-profit making organization is

A. Surplus.

B. Deficit

C. Working capital.

D. Accumulated fund.


Use the following information to answer questions 36 and 37.


ANSWERS



36. The surplus for the year is

A. N 1,970.

B. N 1,890.

C. N 1,690.

D. N 1,390.


37. The total income received for the year is

A. N 2,640.

B. N 2,180.

C. N 1,890.

D.N 1,690.


38. The parties who are paid last in the event of winding-up are

A. preference shareholders.

B. debenture holders.

C. ordinary shareholders.

D. trade creditors.


39. An event that will not require a change in the profit-sharing ratio of partners in a firm is when

A. A partner dies.

B. A partner retires.

C. A new partner is admitted.

D. Partners assets value appreciates.


Use the following information to answer questions 40 and 41.





40. Taiwo's share of profit is

A. N 8,960

B. N 7.404

C N 4.936

D.N 3,296


ANSWERS

41. Obi's share of profit is

A. N 8,960.

B. N 7,404

C. N 4,936

D. N 3,296


42. The accounting entries for cash realized from the sale of assets on dissolution of partnership is debit

A. Cash Account credit Partners Capital Account.

B. Asset Account Credit Cash Account.

C. Cash Account credit Realisation Account.

D. Realisation Account credit Cash Account.


43. The process of distributing shares to successful applicants is

A. Allocation.

B. Apportionment.

C. Allotment.

D. Application


44. Interim dividend paid in the year is

A. Debited to the Profit and Loss Account.

B. Debited to the Income Surplus Account.

C. credited to the Profit and Loss Account.

D. credited to the Income Surplus Account.


45. The basis of apportionment of insurance on building in departmental accounts is

A. Floor space occupied by the department.

B. Purchase cost of the building.

C. Value of the building.

D. Number of offices in the building.


ANSWERS

46. Under the cost method in Branch Accounts, branch gross profit is disclosed in the A. Goods Sent to Branch Account. B. Branch Debtors Account. C. Branch Stock Account. D. Branch Stock Adjustment Account.


Use the following information to answer questions 47 and 48.


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

Ordinary share capital -----------------------------------70,000

Retainod earnings ----------------------------------------31,142

Motor vehicle at cost -------------------------------------21,136

Accumulated depreciation- motorvehicle -----------7,109

Furniture and fittings at cost ----------------------------1,334

Accumulated depreciation Furniture of fittings ---1,007

Stock ----------------------------------------------------------3 2,200

Debtors -------------------------------------------------------49,380

Bank -----------------------------------------------------------15,953

Creditors -----------------------------------------------------11,329


47. Equity holders fund is

A. Lei 12.471

B. Lei 11, 834

C. Le 101, 142

D. Le 70,000


48. Net book value of fixed assets is

A. Le 22, 480

B. Le21, 136

C. Le 14, 354

D. Le 14, 027


49. The authority to incur expenditure in the public sector is

A warrant

B. vote

C. budget

D. voucher


50. Below-the-line item in public sector accounting means such an item is

A. Not budgeted for in the current fiscal year.

B. Budgeted for in the current fiscal year.

C. To be earned forward to the next fiscal year.

D. Less than what is budgeted for.



WASSCE JUNE 2018 FINANCIAL ACCOUNTING OBJECTIVE TEST

ANSWERS

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


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