All 50 questions from the West African Examinations Council (WAEC) Accounting 2024 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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A bank is interested in accounting information of a client for the purpose of
Banks examine a business's financial statements mainly to assess how creditworthy the business is before lending.
An item recorded in the profit and loss account is
General expenses are posted to the debit side of the profit and loss account.
The concept which assumes that transactions should be expressed using a common denominator is
The money measurement concept requires that all transactions be expressed in a common monetary unit.
The letter X in the formula represents
In the straight line formula, X is the cost of the asset, Y is scrap value, and Z is estimated useful life.
The letter Z in the formula represents
In the straight line formula, Z represents the estimated useful life of the asset (in years).
In manufacturing account, wages of machine operators are classified as
Machine operators are usually paid based on output, giving a direct link to production, so their wages form part of prime cost.
The value of purchases is
At 33 1/3% mark-up, profit = 1/4 of cost of sales = Le45,000, so cost of sales = Le135,000. Purchases = Cost of sales + Closing stock - Opening stock = 135,000+4,200-6,000 = Le133,200.
The cost of goods sold is
Sales - Profit = Cost of sales. At 33 1/3% mark-up, profit = 1/4 of cost of sales, giving cost of sales = Le135,000.
The gross profit is
At a 33 1/3% mark-up, profit is 1/4 of cost of sales, i.e. 1/4 x Le180,000 = Le45,000.
A sole trader received the sum of #4,860 cash from a debtor. The effect of this transaction in the balance sheet is a
Cash received from a debtor increases the cash balance while reducing the amount owed by that debtor.
According to the entity concept, ownership of a business is
The entity concept treats the business as separate from its owner(s), even though ownership rests with the owner.
An item recorded in the trial balance is
Opening stock is part of the ledger balances at the start of the year, so it appears in the trial balance; the others are usually year-end adjustments.
The class of shares which are available only to the promoters of a company are
Deferred shares are reserved for the founders/promoters of a company.
Expense incurred but not yet paid is
An unpaid expense already incurred is a short-term obligation owed by the business, i.e. a current liability.
Work-in-progress is an item in
Work-in-progress relates to partly finished production and appears only in the manufacturing account.
In an incomplete record, the excess of opening capital over closing capital is
If closing capital is lower than opening capital, the business has suffered a loss or the owner has made excessive drawings.
Ayo will record this transaction on the
As the purchaser, Ayo records the returned goods (credit note received) on the debit side of his purchases ledger control account, reducing what he owes.
Bayo will record this transaction on the
As the seller, Bayo records the credit note issued on the credit side of his sales ledger control account, reducing what is owed to him.
The concept that underlies the comparing of expenditure for a period with the revenue of the same period is
The matching concept requires that expenses be matched against the revenue they helped generate in the same period.
An item is classified as a current asset if it is
A current asset is one whose value is expected to be realized (turned into cash) within a year of the balance sheet date.
Subscriptions classified in the balance sheet as a current asset is subscriptions
Subscriptions in arrears are amounts still owed to the club, so they are treated as a current asset (a receivable).
Which of the following items will not be charged to the manufacturing account?
Warehouse rent relates to selling and distribution, so it appears only in the profit and loss account, not the manufacturing account.
An account in the real ledger is
The real ledger holds accounts for tangible assets; machinery account is a real account because it relates to a physical asset.
The mark-up for the business is
If margin (profit/sales) = 2/5, then profit/cost = 2/3, so the mark-up (profit as a fraction of cost) is 2/3.
The sales value for the business is
Profit = 2/3 x cost of sales = 2/3 x $120,000 = $80,000. Sales = cost + profit = $120,000 + $80,000 = $200,000.
The objective of preparing a departmental account is to
Departmental accounts help management see which department is profitable and which is not.
A debit balance of D61,000 on a customer's bank statement means that
From the bank's point of view, a customer's account should normally show a credit balance; a debit balance means the customer owes the bank money.
The purchases for 2022 is
Using a total purchases control account: Payments 30,000 + Discount received 1,800 + Closing balance 24,000 - Opening balance 35,000 = Purchases of GH¢20,800.
The balance sheet as at 31/12/2022 will show a current liability of
The closing balance on the purchases (creditors) control account, GH¢24,000, is what is shown as the current liability in the balance sheet.
A credit purchase of D63 from Kofi has been entered in his accounts as D16. This is an error of
Recording the wrong amount for a genuine transaction, while posting it to the correct accounts, is an error of original entry.
The interest on Taiyelolu's capital is
Interest on capital = 10% x #200,000 = #20,000.
Ejire's share of profit is
After deducting interest on capital (#30,000) and salaries (#52,000) from #120,000, #38,000 remains, shared equally to give Ejire #19,000.
Taiyelolu's balance of current account at the end of the year is
Opening balance #40,000 + salary #28,000 + interest on capital #20,000 + share of profit #19,000 - drawings #20,000 = #107,000.
Purchased goodwill is purchase consideration less the value of
Purchased goodwill equals the price paid for a business less the net (assets minus liabilities) identifiable assets acquired.
Errors in the trial balance are corrected using the
Corrections of accounting errors are recorded through journal entries.
The equivalent of income and expenditure account in a limited liability company is
Not-for-profit organisations use an income and expenditure account, which is equivalent to a profit and loss account in a company.
The owner's claim on the asset of a business is
Capital represents the owner's residual claim over the assets of the business.
A partner who has not contributed any form of capital into the firm but only lends his name to be used as a partner is a
A nominal partner only allows the use of his/her name and reputation without contributing capital or taking part in management.
Liquid assets refer to
Liquid assets are cash and near-cash assets that can quickly be converted into cash.
The evidence of payment for the goods Ade bought is the
A receipt is the document that evidences that payment has actually been made.
The amount paid for the goods is
Amount paid = Le30,000 - (7.5% x Le30,000) = Le30,000 - Le2,250 = Le27,750.
The proportion of the issued capital to be paid later is
Uncalled-up capital is the part of issued capital that shareholders have not yet been asked (called upon) to pay.
One of the columns in a single column cash book is
A single column cash book records only cash transactions and includes a 'particulars' column, unlike bank/discount columns found in multi-column cash books.
The amount of recurrent expenditure is
Recurrent expenditure = Purchase of drugs + Electricity + Repair of equipment = D110,000 + D26,000 + D10,000 = D146,000.
The capital expenditure is
Capital expenditure = Purchase of motor van + Building of laboratories = D370,000 + D760,000 = D1,130,000.
Shares which are issued at no cost to existing shareholders in proportion to existing shares held are
Bonus shares are given free to existing shareholders in proportion to their current holding, usually from reserves.
Which of the following items will be recorded on the credit side of a club's income and expenditure account?
Donations received are income to the club and therefore appear on the credit (income) side of the income and expenditure account.
Where the head office maintains all books of account, the cost of goods returned to branch is credited to
Since the head office keeps the accounts, goods returned by the branch are deducted from (credited to) the Goods Sent to Branch account.
Distribution of dividends to shareholders are made from
Dividends can only be shared from profits remaining after tax has been deducted.
The debit side of a trial balance total is GH¢2,000 more than the credit side. Which of the following errors would account for the difference?
Omitting a GH¢2,000 rent receipt (a credit item/income) from the books would leave the debit side GH¢2,000 higher than the credit side.
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