WAEC Financial Accounting 2002 past questions and answers

A fixed amount of money set aside for petty expenses is

1. A.imprest
2. B.float
3. C.receipt
4. D.fund.

Rent Payable Account is an example of a

1. A.nominal account
2. B.real account
3. C.personal account
4. D.private account.

The source document sent by the seller to the buyer when goods are returned is

1. A.credit note
2. B.purchase invoice
3. C.sales invoice
4. D.debit note.

Raw Materials: Stock 1/1/2000 N4,500; Purchases N30,000; Stock 31/12/2000 N6,000
Wages: direct N34,200; indirect N10,800
Factory expenses: rent N18,000; insurance N3,000
Work-in-progress: 1/1/2000 N3,750; 31/12/2000 N6,750
What is the cost of raw materials consumed?

1. A.N34,500
2. B.N31,500
3. C.N30,000
4. D.N28,500

Raw Materials: Stock 1/1/2000 N4,500; Purchases N30,000; Stock 31/12/2000 N6,000
Wages: direct N34,200; indirect N10,800
Factory expenses: rent N18,000; insurance N3,000
Work-in-progress: 1/1/2000 N3,750; 31/12/2000 N6,750
The prime cost is

1. A.N68,700
2. B.N65,700
3. C.N62,700
4. D.N58,200.

Raw Materials: Stock 1/1/2000 N4,500; Purchases N30,000; Stock 31/12/2000 N6,000
Wages: direct N34,200; indirect N10,800
Factory expenses: rent N18,000; insurance N3,000
Work-in-progress: 1/1/2000 N3,750; 31/12/2000 N6,750
The amount of factory overhead is

1. A.N42,300
2. B.N31,800
3. C.N28,800
4. D.N21,000.

Raw Materials: Stock 1/1/2000 N4,500; Purchases N30,000; Stock 31/12/2000 N6,000
Wages: direct N34,200; indirect N10,800
Factory expenses: rent N18,000; insurance N3,000
Work-in-progress: 1/1/2000 N3,750; 31/12/2000 N6,750
The cost of goods manufactured is

1. A.N101,250
2. B.N98,250
3. C.N94,500
4. D.N91,500.

Carriage inward expenses of a business is treated in

1. A.trading account
2. B.balance sheet
3. C.appropriation account
4. D.profit and loss account.

The term bad debt is used to describe

1. A.a debt that cannot be recovered
2. B.a debt that is long over due
3. C.an overcharge on a debtor's account
4. D.a debt owned by a former employee.

An asset was bought on 1st January, 1995 for N60,000. Depreciation was provided for annually at 20% on cost. It was sold for N21,000 on 30th October 1998. Depreciation is charged fully in the year of disposal.
The net book value at the time of sale was

1. A.N39,000
2. B.N16,000
3. C.N14,000
4. D.N12,000.

An asset was bought on 1st January, 1995 for N60,000. Depreciation was provided for annually at 20% on cost. It was sold for N21,000 on 30th October 1998. Depreciation is charged fully in the year of disposal.
Accumulated depreciation is

1. A.N48,000
2. B.N39,000
3. C.N36,000
4. D.N21,000.

An asset was bought on 1st January, 1995 for N60,000. Depreciation was provided for annually at 20% on cost. It was sold for N21,000 on 30th October 1998. Depreciation is charged fully in the year of disposal.
Profit on sale is

1. A.N24,000
2. B.N21,000
3. C.N18,000
4. D.N9,000.

The total of the purchases day book is posted to the purchases account in the

1. A.purchases ledger
2. B.general ledger
3. C.private ledger
4. D.nominal ledger.

The document authorising an officer to incur expenditure is known as

1. A.virement
2. B.budget
3. C.warrant
4. D.vote.

When shares are oversubscribed, the promoter may decide to scale down. When this is done, the shares are issued proportionately

1. A.on pro-rata
2. B.at discount
3. C.at par
4. D.at premium.

Land and buildings N20,000
Stock N5,000
Cash in hand N1,000
Profit and loss b/f N14,000
Rent owing N400
Creditors N11,000
Furniture and fittings N7,500
Motor vehicle N12,500
Debtors N13,750
Bank overdraft N8,750
The value of current liabilities is

1. A.N32,750
2. B.N20,150
3. C.N19,750
4. D.N11,000.

Land and buildings N20,000
Stock N5,000
Cash in hand N1,000
Profit and loss b/f N14,000
Rent owing N400
Creditors N11,000
Furniture and fittings N7,500
Motor vehicle N12,500
Debtors N13,750
Bank overdraft N8,750
The value of current assets is

1. A.N28,500
2. B.N20,150
3. C.N19,750
4. D.N17,000.

Land and buildings N20,000
Stock N5,000
Cash in hand N1,000
Profit and loss b/f N14,000
Rent owing N400
Creditors N11,000
Furniture and fittings N7,500
Motor vehicle N12,500
Debtors N13,750
Bank overdraft N8,750
The opening capital is

1. A.N32,000
2. B.N26,000
3. C.N25,600
4. D.N14,000.

Land and buildings N20,000
Stock N5,000
Cash in hand N1,000
Profit and loss b/f N14,000
Rent owing N400
Creditors N11,000
Furniture and fittings N7,500
Motor vehicle N12,500
Debtors N13,750
Bank overdraft N8,750
The value of fixed assets is

1. A.N57,300
2. B.N47,500
3. C.N40,000
4. D.37,500.

A deduction from the sales price of goods that is allowed if payment is made within a specified period of time is

1. A.trade discount
2. B.cash discount
3. C.quantity discount
4. D.rebate.

A trader paid N15,000 on rent for 15 months but charged N12,000 to the Profit and Loss Account for the year. This is the concept of

1. A.accrual
2. B.materiality
3. C.prudence
4. D.going-concern.

Partner's interest on capital is shown in the

1. A.Profit and Loss Account
2. B.Partners Fixed Capital Account
3. C.Profit and Loss Appropriation Account
4. D.Trading Account.

Baba and Tunde are partners sharing profits and losses equally. Extracts from their books showed (Baba; Tunde):
Capital Accounts 1 January, 2000: N40,000; N50,000
Current Accounts 1 January, 2000: N20,000 Cr; N15,000 Cr
Drawings during the year: N4,000; N5,000
Salaries: N5,000; N5,000
Interest on capital is 10%. The net profit for the year is N40,000
The interest on Tunde's capital is

1. A.N10,000
2. B.N5,000
3. C.N4,000
4. D.N1,500.

Baba and Tunde are partners sharing profits and losses equally. Extracts from their books showed (Baba; Tunde):
Capital Accounts 1 January, 2000: N40,000; N50,000
Current Accounts 1 January, 2000: N20,000 Cr; N15,000 Cr
Drawings during the year: N4,000; N5,000
Salaries: N5,000; N5,000
Interest on capital is 10%. The net profit for the year is N40,000
The share of profit of each partner is

1. A.N20,000
2. B.N10,500
3. C.N5,000
4. D.N4,000.

Baba and Tunde are partners sharing profits and losses equally. Extracts from their books showed (Baba; Tunde):
Capital Accounts 1 January, 2000: N40,000; N50,000
Current Accounts 1 January, 2000: N20,000 Cr; N15,000 Cr
Drawings during the year: N4,000; N5,000
Salaries: N5,000; N5,000
Interest on capital is 10%. The net profit for the year is N40,000
Baba's Current Account balance on 31st December, 2000 is

1. A.N35,500
2. B.N25,000
3. C.N21,000
4. D.N20,000

Depreciation is

1. A.cost of repairs incurred on a fixed asset
2. B.a charge for the wear and tear of fixed assets
3. C.the cost incurred on replacing a fixed asset
4. D.provision for loss of fixed asset.

Which of the following is not an input device?

1. A.Diskette
2. B.Card
3. C.Keyboard
4. D.Printer

A trader paid insurance premium of N45,000 for 15 months ended 31st March, 2000. He prepares account to 31st December.
How much is charged to Profit and Loss account for the year 2000?

1. A.N45,000
2. B.N42,000
3. C.N36,000
4. D.N33,000

A trader paid insurance premium of N45,000 for 15 months ended 31st March, 2000. He prepares account to 31st December.
How much is carried in the Balance Sheet at 31st December, 2000?

1. A.N45,000
2. B.N12,000
3. C.N9,000
4. D.N4,500.

A trader paid insurance premium of N45,000 for 15 months ended 31st March, 2000. He prepares account to 31st December.
The amount carried in the Balance Sheet is classified as

1. A.current asset
2. B.current liability
3. C.capital
4. D.long-term liability

The total amount of money set aside for a particular purpose by government is

1. A.fund
2. B.vote
3. C.virement
4. D.budget

"Accountants do not count chickens before they are hatched". This is the concept of

1. A.accrual
2. B.materiality
3. C.realisation
4. D.going-concern

Which of the following belongs to the sales ledger?

1. A.Motor Van Disposal Account
2. B.Bank Account
3. C.Debtors Account
4. D.Rent and Rates Account.

Section A (answer two questions only from this section)
1. Explain the following terms: (a) Debenture; (b) Authorised share capital; (c) Issued share capital; (d) Revenue reserves; (e) Proposed dividend

2. (a) What is an account? (b) Explain the principle of double entry system. (c) In which books of prime entry would the following transactions be recorded? (i) A purchase on credit of goods for resale (ii) A cash purchase of a filing cabinet for office use (iii) Credit sale to a customer (iv) Correction of a posting error by which a new machine for use in the factory has been debited to purchases account

3. Explain the following errors giving an example of each (a) Principle; (b) Compensation; (c) Commission (d) Complete reversal of entries; (e) Omission.

4. (a) What is bank reconciliation statement? (b) List four items that cause disagreement between bank statement balance and cash book balance. (c) State one purpose for bank reconciliation

Section B – Financial Accounting Practice (answer three questions only from this section)
5. Trouser and Shirt are partners sharing profits and losses in the ratio 2 : 1. The following balances were extracted from the books of the firm for the year ended 31st December, 2000.
Capital Accounts: Trouser N12,500 (Cr); Shirt N10,000 (Cr)
Drawings: Trouser N1,000 (Dr); Shirt N750 (Dr)
Purchases and Sales: N100,000 (Dr); N125,000 (Cr)
Salaries: N12,500 (Dr)
General Expenses: N5,000 (Dr)
Discounts: N1,250 (Dr); N1,000 (Cr)
Rates: N250 (Dr)
Freehold property at cost: N12,500 (Dr)
Bank balance: N2,500 (Dr)
Debtors and Creditors: N7,500 (Dr); N6,500 (Cr)
Furniture and equipment at cost (N7,500): N6,000 (Dr)
Stock – 1st January: N5,750 (Dr)
Totals: N155,000 / N155,000
Additional information:
(a) Stock at 31st December, 2000 was N6,250 (b) Rates paid in advance at 31st December, 2000 was N50 (c) Bad debt to be written off N150 (d) Depreciation on furniture and equipment is to be provided at the rate of 5% per annum on cost. (e) Interest on capital is 10% per annum. (f) Interest on drawings: Trouser N50, Shirt N75
You are required to prepare: (i) Trading and Profit and Loss Account for the year ended 31st December, 2000; (ii) Profit and Loss Appropriation Account; (iii) Partners Current Accounts; and (iv) Balance Sheet as at 31st December, 2000.

6. Akua Amoah Enterprises: During the three months ended 31st March 2000; business transactions were as follows:
Jan. 1st Commenced business by introducing N500,000 into a bank account.
5th Bought N100,000 of fixtures and fittings from Adom Supplies Limited on credit.
15th Bought office stationery for N2,000 paying by cheque.
28th Bought goods for resale for N50,000 paying by cheque.
Feb. 2nd Paid Adom Supplies Limited a cheque for N100,000.
3rd Rent of N60,000 for business premises was paid by cheque.
10th Sold some of the goods for N40,000 on credit to K. Danso.
25th Bought goods on credit from Continental Traders Limited for N70,000.
Mar. 1st Bought N15,000 of fixtures and fittings from Adom Supplies Limited on credit.
8th Received cheque payment of N40,000 from K. Danso.
12th Bought office stationery for N1,000 paying by cheque.
31st Sold goods for N30,000 receiving cheque in payment.
You are required to enter the above transactions in the relevant ledger accounts, balance off and extract a trial balance as at March 31st, 2000.

7. DATA LIMITED is issuing 10,000 ordinary shares of N1 each payable N0.10 on application, N0.20 on allotment, N0.40 on the First Call and N0.30 on the Second Call. Applications were received for 15,500 shares. A refund of the money is made in respect of 500 shares while for the remaining 15,000 shares applied for an allotment is to be made on the basis of 2 shares for every 3 applied for. The excess application monies are set off against the allotment monies.
You are required to prepare: (a) Bank Account (b) Application and Allotment Account (c) First Call Account (d) Second Call Account (e) Ordinary Share Capital Account (f) Balance Sheet extract.

8. The following is a summary of the final accounts of Lux Limited for the year ended 31st December, 2000.
Trading, Profit and Loss and Appropriation Account: Opening stock N3,600; Purchases N80,800 (N84,400); Closing stock N4,400 (N80,000); Gross profit N16,000; Sales N96,000. Selling and distribution N3,000; Insurance N2,000; Salaries and wages N2,000; Travelling expenses N1,000; Net profit c/d N8,000. Proposed dividend N4,000; Revenue reserve N4,000.
Balance Sheet as at 31st December, 2000: 40,000 Ordinary shares of N1 each N40,000; Revenue reserve N10,000 (N50,000); Creditors N4,000; Proposed dividend N4,000 (N8,000); total N58,000. Land and building N20,000; Machinery N18,000 (N38,000); Stock N4,000; Debtors N12,000; Cash N3,600 (N20,000); total N58,000.
You are required to calculate: (a) current ratio (b) quick ratio (c) working capital (d) return on capital employed (e) dividend per share (f) net profit margin.

9. A country "Y" comprises five states – A, B, C, D and E. The following information relate to the revenue for the fiscal year ended 31st December, 2000.
Receipts from mineral resources N7,000,000
Receipts from agriculture N669,000
Import duties N2,652,000
Excise Duties N1,275,000
Permit and licence fees N250,000
Personal and corporate income tax N3,654,000
Other income N500,000
Additional information:
(a) Revenue is shared as follows: 40% to the national government; 10% to each of the states; 5% of the total revenue to the consolidated fund; 5% of total revenue to be shared by the states on population basis.
(b) The population of each state is as follows: A 450,000; B 400,000; C 500,000; D 300,000; E 350,000
You are required to compute: (i) Total revenue for country Y during the year 2000; (ii) Revenue for the national government; (iii) Revenue for the states individually and collectively.