All 50 questions from the West African Examinations Council (WAEC) Accounting 2025 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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Ledger is a principal book that contains.
Ledger is used to record the double entry of all transactions that occur in the company.
Accounts that have credit balance are closed by using the statement.
Generally, all ledger accounts are closed with the statement balance c/d (c/d means carried down).
An account is having debit balance is established when.
When the amount of the debit side is higher than the credit side, such an account is said to have a debit balance, and vice versa.
Which of the following items will be appearing on the credit side of the ledger account?
In the cash book, when a supplier is paid, the discount received will be deducted. Both payment and discount received appear on the credit side of the cash book.
Among these, which item is used as the base for preparing trial balance?
As it is always said, the trial balance is a book of ledger balances. Thus, the ledger will be used to prepare the trial balance.
Trial balance is used to check the accuracy of
Since the trial balance shows the balances of the ledger, it is used to test the accuracy of the ledger.
In the books of account, if a transaction is completely omitted, will it affect the trial balance?
An omitted transaction will not affect the trial balance since there will be no ledger entry for it.
What is the trial balance used for?
The trial balance brings together the balances of the ledgers.
On the balance sheet, accruals, notes payable, and account payable are listed under which category?
Accruals, notes payable and other short-term obligations due on the business are all posted to the current liabilities of the business in the balance sheet.
Inventories, cash and equivalents, and accounts receivables are listed as
Inventories, cash and bank balances and other short-term cash flows or assets are recorded in the current assets section of the business's balance sheet.
Which of the following is not a current asset?
Land is a long-term asset. Thus, it is regarded as a fixed asset.
In the situation of bankruptcy, a stock which is recorded above common stock and below debt is
Preferred stock has a higher claim on earnings and assets than common stock, so it comes above common stock. Debt has a higher obligation than preferred stock, so it comes below debt.
A firm buys products but does not pay suppliers instantly. This is recorded as
When supplies are not paid for, the amount owed becomes creditors (accounts payable).
Accounting provides data or information on
Accounting provides all the information listed above.
Long term assets without any physical existence but possessing a value are called
Assets such as patents, which exist for the long term but are not physical, are referred to as intangible assets.
The assets that can be easily converted into cash within a short period, i.e., 1 year or less, are known as
Current assets are assets that can be converted into cash within a short period of time.
Copyrights, Patents and Trademarks are examples of
Assets such as patents, which exist for the long term but are not physical, are referred to as intangible assets.
The debts which are to be repaid within a short period (a year or less) are referred to as
Obligations due from the business within a short period of time are referred to as current liabilities.
Gross profit is
Gross profit is sales less cost of goods sold.
Net profit is calculated in which of the following statements?
Net profit will show in the profit and loss account if the credit side of the account is higher than the debit side.
In order to find out the value of the closing stock at the end of the financial year, we
Stocktaking is used to calculate the remaining stock at the end of a particular period.
Which of these best explains fixed assets?
Fixed assets are assets used for the long term, such as buildings, machinery, etc.
The charges of placing commodities into a saleable condition should be charged to
This is like a packaging cost. It forms part of selling expenses and thus is charged to the profit and loss account.
Suppliers' personal a/c are seen in the
The purchases ledger records all suppliers of the business, so the personal account will be posted there.
If you want to ensure that your money will be secured if cheques sent are lost in the post, you should
Crossing the cheque makes it more secure.
Discounts received are
Discounts received are given to the buyer by the seller.
Sales invoices are first entered in
It is the sales journal that first records the sales invoice before it is posted into the ledger.
Which of the following will be entered in the Purchases Journal?
Purchases invoices are first recorded in the purchases journal before being posted into the ledger.
At the balance sheet date, the balance on the Accumulated Provision for Depreciation Account is
If the business records fixed assets at cost in the balance sheet, the balance in the accumulated depreciation account is deducted from the cost of the assets in the balance sheet.
If we take goods for our own use, we should
Goods withdrawn for personal use no longer form part of purchases, since purchases are for resale. The entry is Dr: Drawings Account, Cr: Purchases Account.
When a petty cash book is kept, there will be
A petty cash book reduces the burden on the general ledger, as items of little amount are all recorded in the petty cash book.
If a trial balance total does not agree, the difference must be entered in
The suspense account is used to record the difference in the trial balance temporarily until the error is discovered.
If it is required to maintain fixed capitals, then the partners' shares of profits must be
When a fixed capital account is used in a partnership, a current account must be opened to adjust for transactions between the partners and the business.
The capital budget is associated with
The capital budget records expenses and incomes expected to last beyond a single accounting cycle.
CAPM stands for
CAPM means capital asset pricing model.
Statement of cash flows includes
The cash flow statement records the financing, operating and investing activities of the business.
A company that issues stocks and bonds to raise funds results in
When stocks and bonds are issued, the company receives more cash from its financing activities.
The purchase value of an asset over its serviceable life is categorised as
The purchase value of an asset divided by its useful life is the depreciation per year on that asset.
The basic financial statements include
All the statements mentioned above form the major financial statements of any company.
Which item comes under financing activities in the cash flow statement?
All the mentioned activities fall under the financing activities of the business.
The accounting entries in the books of head office for goods returned by a customer to a branch are:
For goods returned, the head office records: debit Branch Stock Account and credit Returns Inwards Account.
In a company's balance sheet, rent prepaid is classified as a
Rent prepaid is an expense prepaid; it is posted to current assets.
The accounting concept which underlies providing for doubtful debt is
The concept of prudence requires an accountant not to overstate profit; hence provision is made for doubtful debts.
The document which contains monies allocated in public sector is a
A budget is the document where all expenses and incomes of government are captured.
Which of the following items is an example of an intangible asset?
Copyright is an asset to a writer but it is intangible because it cannot be seen or touched.
The maximum number of shares that a company is allowed by the law to offer to the public for subscription is
Authorized capital is the total amount of shares that a company can issue to the public for subscription.
One of the features of cash basis of accounting in public sector is that
Cash basis of accounting bases all records on a single write-off; all expenses are written off within the year incurred.
The working capital is
Working capital = Current assets - Current liabilities = 210,000 - 95,000 = 115,000.
Total shareholders' fund is
Shareholders' fund = Ordinary shares + Income surplus = GH¢(130,000+225,000) = GH¢355,000.
The net assets of the company is
Net assets = Fixed assets + Working capital = GH¢495,000 + GH¢210,000 = GH¢705,000.
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