All 40 questions from the West African Examinations Council (WAEC) Book Keeping 2024 Objective paper, with the correct answer and a full explanation for each. Free, no signup needed.
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The claim on the assets of a business by outsiders is classified as A.
Liabilities are debts which the company owes outsiders. It is the claim of outsiders against the assets of the company.
Which of the following transactions will increase business assets?
No answer given in the WAEC key for this item.
Purchase of machine for #50,000 was debited to purchase account. This is an error of A.
Error of principle occurs when a transaction is recorded in the wrong class of account.
The accounting treatment for cash withdrawn by the owner of a business for private use is:
The accounting treatment for cash withdrawn for personal use is dr. Drawings A/C and cr. Cash A/C.
Which of the following procedures demonstrates the imprest system?
The imprest system involves releasing money to float, spending of the money and reimbursement.
The source document used to prepare the purchases day book is A.
The invoice is the ultimate source document for preparing the purchase day book.
A balance sheet shows A.
The balance sheet is an expression of assets = capital + liabilities. It shows assets and claims against the assets.
Discount received is posted to the credit side of A.
Discount received is an income, thus it will show on the credit side of the profit and loss account.
Matching concept in accounting is the basis of I. determining periodic profits II. deferring unexpired costs III. differentiating between cost of goods sold and purchases
Matching concept states that income and expenses should be matched with the year in which they are incurred.
(A motor vehicle bought for #1,600,000 was estimated to have a useful life span of 4 years and a residual value of #200,000. The straight line method of calculating depreciation is used. The motor vehicle is sold at the end of the fourth year for #250,000.) The net book value at the end of the third year is A.
Depreciation = (cost-scrap value)/4 = (1,600,000-200,000)/4 = 350,000. Depreciation for 3yrs = 350,000x3=1,050,000. Net book value at end of 3rd year = 1,600,000-1,050,000=550,000.
The accumulated depreciation at the end of the second year is A.
Accumulated depreciation at the end of second year = 350,000 x 2 = 700,000.
The asset disposal account at the end of the fourth year will be entered with a posting of A.
See working in the WAEC key.
The amount that is earned but which is yet to be received at the end of a financial period is A.
Accrued income is income due but not yet paid.
A statement prepared to show the financial position of a business is A.
A balance sheet is a statement that shows the financial position of a company as at a particular date.
A debit note serves as the source document for correcting A.
When a person is undercharged, a debit note is issued to the person to show that he is indebted to the company. (Use the following information to answer questions 16 to 18: the total debtors account of Audu Enterprises for the year 2020 is #500,000. Out of this amount, #50,000 is deemed irrecoverable and 5% of the balance is unlikely to be collected.)
The provision for doubtful debts for the year is A.
Net value of debtor = 500,000-50,000-27,500 = 422,500 (provision computed as 5% of (500,000-50,000) = 22,500; WAEC key marks no definitive answer for this item).
The bad debt to be charged to the profit and loss account is A.
No answer given in the WAEC key for this item.
The net value of the debtors in the balance sheet is A.
Net value of debtor = 500,000-50,000-22,500 = 422,500 (closest option D).
The method of stock valuation which overstates profit during inflation is A.
FIFO overstates profit during an inflation period.
An item recorded in the debit side of the trial balance is A.
Expenses and assets appear on the debit side of the trial balance.
Prepayments are shown in the balance sheet as A.
Prepayments are expenses paid but not yet used. It is an asset to the company.
A petty cashier has a cash float of #53,000 and #38,600 was spent, the reimbursement would be A.
The petty cashier is always reimbursed with the amount spent.
A person whom a business owes for the goods or services supplied by him is the A.
If a business owes its supplier for goods and services supplied, the supplier is a creditor.
Purchases for #12,960 was recorded in the day book as #12,690. This is an error of A.
This is an error of original entry because it was committed when the entry was made.
Which of the following features describe a receipts and payments account? I. It is a nominal account II. It contains only items of revenue in nature III. It is a real account IV. It records capital expenditure items
The receipt and payment account, just like the cash account, is a real account and can record both capital and revenue expenditures and receipts.
Sales of goods to the value of N500 was debited to Ade instead of Adu. The journal entry for correcting this error is:
This is error of commission. It is usually corrected with reverse of the error.
The book of original entry for recording cash sales is A.
Cash book is the book of original entry for recording any cash transaction.
A self-balancing ledger is A.
After appropriating all transactions to their places, the appropriation account balances off; a control account is a self-balancing ledger.
Subscription in advance is treated in the balance sheet as an item under A.
Subscription in advance is undue income already paid. It is a current liability to the company.
(Use: Opening stock #120,000, Sales #800,000, Purchases #478,000, Carriage inwards #21,000, Returns inwards #18,000, Closing stock #90,000, Returns outwards #28,000.) The cost of goods available for sale is A.
Cost of goods available for sale = 120,000+478,000+21,000-28,000 = 591,000.
The net sales is A.
Net sales = 800,000-18,000 = 782,000.
The gross profit is A.
Gross profit = 782,000-(591,000-90,000) = 281,000.
The word Limited written after the name of a company means that the A.
The word Limited at the end of a company's name indicates that the liability of members is limited to the capital contributed.
(Classification of Account: X -> Impersonal Account -> Y. See diagram.) The letter X represents A.
Broadly speaking, in accounting, accounts are divided into personal account and impersonal account.
The letter Y represents A.
Impersonal accounts are divided into nominal account and real account.
Which of the following factors can make an entrepreneur successful?
Finance is the bedrock of any business. Its availability propels businesses to succeed.
The excess of the assets of a business over its liabilities is A.
The accounting equation states that capital + liabilities = assets. Thus, capital = assets - liabilities.
The three column cash book differs from the two column cash book in that it has A.
The discount column is the only thing that differentiates a two-column cash book from a three column cash book.
(Prepayments #50,000; Stock #65,000; Provision for doubtful debts #35,000; Trade debtors #80,000; Trade creditors #70,000.) The net debtor value is A.
Net debtors = 80,000-35,000 = 45,000. (Closest working shown gives C.)
The working capital is A.
Working capital = current assets - current liabilities = (50,000+65,000+45,000)-70,000 = 90,000.
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