WAEC SSCE - Financial Accounting - 2009 (Objective)

Question 1 Report

Which of the following is not part of the double entry system?

trading account

proffit and loss account

appropriation account

balance sheet

Principles Of Double Entry

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Question 2 Report

The purchase of a typewriter for office use for ₦2,000 is debited to

creditors

bank account

purchases account

equipment account

Answer Details

The purchase of a typewriter for office use for ₦2,000 should be debited to the equipment account. This is because the typewriter is a type of fixed asset, and the equipment account is used to record the cost of fixed assets purchased by the company for use in its operations. The creditors account is used to record amounts owed to suppliers for goods or services purchased on credit, so it would not be appropriate to debit the typewriter purchase to this account. The bank account is used to record cash transactions, so it would not be appropriate to debit the typewriter purchase to this account unless the purchase was made with cash. The purchases account is used to record the cost of inventory purchased for resale, so it would not be appropriate to debit the typewriter purchase to this account unless the typewriter was purchased for resale.

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Cashbook

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Question 3 Report

Cost of extension to a factory building is classified as

capital receipt

revenue expenditure

capital expenditure

revenue receipt

Answer Details

The cost of extension to a factory building is classified as capital expenditure. Capital expenditure refers to the expenditure incurred by a company for acquiring, improving, or maintaining its fixed assets such as land, building, machinery, etc. The cost of extending a factory building is an expense that results in a long-term benefit to the company, and therefore it is treated as a capital expenditure. Capital expenditure is usually recorded on the balance sheet and depreciated over time.

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Read lesson note on Principles Of Double Entry (JAMB)

Accounting Concepts

Principles Of Double Entry

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Question 4 Report

Which of the following are Personal Accounts? i. wages ii. debtors ii. creditors iv. buildings

i,ii and iii only

ii and iii only

ii and iv only

iii and iv only

Answer Details

Personal accounts are accounts that represent individuals, organizations, or groups. Based on this definition, wages and buildings are not personal accounts as they do not represent individuals or organizations. On the other hand, debtors and creditors are personal accounts as they represent individuals and organizations with whom the business has financial transactions. Therefore, the correct answer is option (ii) and (iii) only.

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Nature And Significance Of Accounting

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Question 5 Report

A medium of imputing data into the computer is through the use of the

keyboard

monitor

software

hardware

Answer Details

A medium of imputing data into the computer is through the use of a keyboard. A keyboard is an input device that allows the user to input alphanumeric characters and commands into the computer. It consists of a set of keys, each with a specific function, that can be pressed to input data or execute commands. When a key is pressed, a signal is sent to the computer which then processes the input and performs the required action. Keyboards come in different layouts, designs and sizes depending on the user's preference and the intended use of the computer.

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Information Technology In Accounting

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Question 6 Report

A motor car costing D100,000 was depreciated at 20% per annum by the diminishing balance method. Two years later, it was sold for D60,000. Using the information, the net profit or loss on the sale was

D 40,000 profit

D 4,000 profit

D 4,000 loss

D 40,000 loss

Answer Details

Using the diminishing balance method, the depreciation for the first year would be 20% of D100,000 which is D20,000. The written down value at the end of the first year would be D80,000 (D100,000 - D20,000). In the second year, the depreciation would be 20% of D80,000 which is D16,000. The written down value at the end of the second year would be D64,000 (D80,000 - D16,000). The net book value (NBV) of the motor car at the time of sale would be D64,000. Therefore, the loss on sale would be the difference between the net book value (NBV) and the sale price. Loss on sale = NBV - Sale price Loss on sale = D64,000 - D60,000 Loss on sale = D4,000 So, the net loss on the sale of the motor car is D4,000. Therefore, the correct option is D 4,000 loss.

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Stock Valuation

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Question 7 Report

A difference between the debit and credit totals in a trial balance is placed in

bank reconciliation statement

profit and loss account

suspense account

appropriate account

Answer Details

When preparing a trial balance, the total of all the debit balances should equal the total of all the credit balances. However, if there is a difference between the debit and credit totals, this indicates an error in the accounting records. To correct this error, the difference is placed in a temporary account called a "suspense account." The suspense account is used to temporarily hold the difference until it can be identified and corrected. Once the error is identified and corrected, the appropriate account is adjusted to reflect the correction. If the difference is due to a timing difference or an item that cannot be specifically identified, the amount in the suspense account will be transferred to the profit and loss account or appropriate account. Therefore, the correct option to select in this scenario would be the "suspense account."

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Bank Transactions And Reconciliation Statements

The Final Accounts Of A Sole Trader

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Question 8 Report

Rent is apportioned each department on the basis of

area or space occupied

equuality

turnover

purchases

Answer Details

Rent can be apportioned to different departments in a business based on different methods. However, the most common method used to apportion rent is based on the area or space occupied by each department. In this method, the total rent payable is divided by the total area of the building and then multiplied by the area occupied by each department. This gives the amount of rent that each department should be charged based on the space they occupy. This method ensures that each department pays a fair share of the rent based on the amount of space they use, and it is a simple and objective way to apportion rent.

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Departmental Accounts

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Question 9 Report

The authorized capital of city entertainment company is made up of 200,000 2\(\frac{1}{2}\)% preference shares of Le 60 each and 300,000 ordinary shares have been issued at Le 30 each and fully paid. All the preference dividend and recommended ordinary divided Le 0.10 per share. Using the following information, What is the amount of the share premium?

Le 9,000,000

Le 500,000

Le 3,000,000

Le 2,400,000

Company Accounts

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Question 10 Report

In the balance sheet, the balance on the provision for Depreciation Account shown as

addition to fixed assets

deduction from fixed assets

addition to capital

duduction from current liabilies

Answer Details

In the balance sheet, the balance on the provision for Depreciation Account is shown as a deduction from fixed assets. The provision for depreciation is the estimated amount set aside to be deducted from the original cost of the asset in order to calculate its net book value or carrying value. The net book value of an asset is the difference between its original cost and the accumulated depreciation charged against it. Since the provision for depreciation is a contra account to fixed assets, it is shown as a deduction from fixed assets in the balance sheet.

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Read lesson note on Provisions And Reserves (WAEC)

Accounts Of Not-for-profit Making Organizations

Provisions And Reserves

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Question 11 Report

Hardware in data processing refers to

programs runs on the computer

entry and storage of information on computer

microsoft disc operating system

mechanical components of the computer

Answer Details

Hardware in data processing refers to the mechanical and physical components of a computer system such as the central processing unit (CPU), input/output devices, storage devices, and other components that make up the physical structure of the computer. These are the tangible, physical parts of the computer system that can be seen, touched, and manipulated. The hardware of a computer system enables it to receive, process, store, and output data or information. Therefore, the correct option is "mechanical components of the computer."

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Information Technology In Accounting

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Question 12 Report

Credit sales was debited to A. Akpan instead of B. Akpan. This is an error of

principle

original entry

omission

comission

Cashbook

Incomplete Records And Single Entry

Principles Of Double Entry

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Question 13 Report

In a not for profit making organization, the excess of income over expenditure is

added to capital

added to accumulated fund

deduced from capital

deducted from accumulated fund

Answer Details

In a not for profit organization, any excess of income over expenditure is not considered as profit. Rather, it is added to the accumulated fund. The accumulated fund represents the accumulated surplus of the organization over time, and it is used to finance the organization's future activities. This is because not for profit organizations do not have shareholders or owners who can claim any surplus or profit generated by the organization. Therefore, any excess of income over expenditure is added to the accumulated fund, which is essentially the organization's equity.

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Accounts Of Not-for-profit Making Organizations

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Question 14 Report

A service which a firm has enjoyed, but has not yet been paid for is

accured expense

preliminary expense

prepaid expense

overhead expense

Answer Details

An accrued expense is a service that a firm has enjoyed, but has not yet been paid for. This means that the firm has received the benefit of the service but has not yet paid for it. Accrued expenses are usually recorded as a liability in the financial statements, indicating that the firm owes money for the service received. Examples of accrued expenses include salaries and wages owed to employees, interest owed on loans, and rent owed on leased properties.

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Read lesson note on Accounting Concepts (WAEC)

Read lesson note on Accounts Of Not-for-profit Making Organizations (WAEC)

Read lesson note on Nature And Significance Of Accounting (JAMB)

Accounting For Value Added Tax

Accounting Concepts

Accounts Of Not-for-profit Making Organizations

Nature And Significance Of Accounting

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Question 15 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & D\\ \hline \text{Purchase of raw materials} & 236,500\\ \text{Returns of raw materials} & 4,750\\ \text{Carriage on raw materials} & 44,000\\ \text{Stock of raw materials at close} & 39,500 \\ \text{Factory fuel} & 3150,000\\ \text{Direct wages} & 205,000\\ \text{Indirect wages} & 31, 250\\ \text{Factory power} & 105,000\\ \text{Work-in-progress at start} & 32,500\end{array}\)
The total factory overhead is

D 318,750

D 286,250

D 255,000

D 236,250

Manufacturing Accounts

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Question 16 Report

The authorized capital of city entertainment company is made up of 200,000 2\(\frac{1}{2}\)% preference shares of Le 60 each and 300,000 ordinary shares have been issued at Le 30 each and fully paid. All the preference dividend and recommended ordinary divided Le 0.10 per share. Using the following information, the value of the ordinary share capital to be stated in the balance sheet is

Le 9,000,000

Le 7,200,000

Le 4,800,000

Le 4,000,000

Joint Venture Accounts

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Question 17 Report

The authorized capital of city entertainment company is made up of 200,000 2\(\frac{1}{2}\)% preference shares of Le 60 each and 300,000 ordinary shares have been issued at Le 30 each and fully paid. All the preference dividend and recommended ordinary divided Le 0.10 per share. Using the following information, what is the amount of preference dividend and recommended ordinary divided of Le 0.10 per share

Le 600,000

Le 500,000

Le 3,00,000

Le 5,000

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Question 18 Report

Which of the following is a self-balancing account?

capital

interst on capital

drawings

share of profit

Control Accounts And Self-balancing Ledgers

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Question 19 Report

The reduction in value of an intangible asset is

depletion

depression

amortization

appreciation

Answer Details

The reduction in value of an intangible asset is called amortization. Intangible assets are assets that don't have a physical form, such as patents, trademarks, and copyrights. These assets have a limited useful life, and their value decreases over time due to wear and tear or obsolescence. Amortization is the process of spreading the cost of the intangible asset over its useful life, in a way that reflects its declining value. The purpose of amortization is to match the cost of the asset with the revenues it generates over time, so that the financial statements reflect a more accurate picture of the company's financial performance.

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Read lesson note on Principles Of Double Entry (JAMB)

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 20 Report

A three column cash book contains column for

cash, assets and liabilities

bank, cash and assets

cash, bank and return

dscount, cash and bank

Cashbook

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Question 21 Report

A motor car costing D100,000 was depreciated at 20% per annum by the diminishing balance method. Two years later, it was sold for D60,000. Using the information, the net book value at the time of sales is

D 64,000

D 60,000

D 40,000

D 36,000

Provisions And Reserves

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Question 22 Report

The authority of the Accountant-General to disburse from government fund is

provision

warrant

vote

estimate

Answer Details

The authority of the Accountant-General to disburse from government fund is a "warrant." A warrant is an official document issued by the appropriate authority (in this case, the Accountant-General) to authorize the release of funds from the government treasury for a specific purpose. It serves as a legal authority for the Accountant-General to disburse money from the government fund to the appropriate party.

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Public Sector Accounting

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Question 23 Report

Which of the following is not part of factory overhead?

factory salaries

factory lighting and heating

depreciation of plant and machinery

depreciation of furniture and fixtures

Answer Details

The term "factory overhead" refers to all indirect costs incurred in the manufacturing process that are not directly traceable to a particular product. These costs are necessary for the production process, but cannot be directly attributed to a single product unit. Examples of factory overhead include factory salaries, factory lighting and heating, and depreciation of plant and machinery. Depreciation of furniture and fixtures, on the other hand, is not typically included in factory overhead as it is not related to the production process. Therefore, the answer is: depreciation of furniture and fixtures.

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Read lesson note on Manufacturing Accounts (JAMB)

Manufacturing Accounts

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Question 24 Report

Which of the following is not a source of revenue for local government?

mining royaltyies

radio and TV licences

tenement/property rates

business permit fee

Public Sector Accounting

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Question 25 Report

Which of the following does not appear in a bank statement?

dividend received

bank charges

uncredited cheques

dishonoured cheques

Bank Transactions And Reconciliation Statements

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Question 26 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & D\\ \hline \text{Purchase of raw materials} & 236,500\\ \text{Returns of raw materials} & 4,750\\ \text{Carriage on raw materials} & 44,000\\ \text{Stock of raw materials at close} & 39,500 \\ \text{Factory fuel} & 150,000\\ \text{Direct wages} & 205,000\\ \text{Indirect wages} & 31, 250\\ \text{Factory power} & 3105,000\\ \text{Work-in-progress at start} & 32,500\end{array}\)
What is the prime cost???

D 717,500

D 231,250

D 286,250

D 270,500

Manufacturing Accounts

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Question 27 Report

Which of the following books of original entry is used to record all payments and receipt by cash or cheque?

sales day book

cash book

purchase day book

general journal

Answer Details

The book of original entry used to record all payments and receipts by cash or cheque is the "Cash Book". This book serves as a record of all transactions involving cash and bank, and it is considered the primary source of entry for the cash and bank accounts in the ledger. It includes both the cash transactions that are entered in the bank account and those that are directly recorded in the cash account. The other options mentioned (sales day book, purchase day book, and general journal) are books of original entry used for specific types of transactions, but not for cash and bank transactions.

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Cashbook

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Question 28 Report

A stock as a form of capital of a company comprises

tons of merchandise

units of goods

units of shares

bundles of wares

Answer Details

A stock, as a form of capital of a company, comprises units of shares. Shares are units of ownership in a company that are issued to investors in exchange for capital. When a person buys a share of a company's stock, they become a part owner of the company and are entitled to a portion of its profits as well as the right to vote on company matters. The total amount of shares issued by a company represents the total amount of capital it has raised through stock issuance. Therefore, the answer to the question is "units of shares."

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Nature And Significance Of Accounting

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Question 29 Report

Abu, a debtor to Dania, owed ₦10,500 at the start of the month. He paid cash of ₦40,005 during the month and received additional credit sales of ₦20,000.Using the information, Abu's balance at the end of the month is

₦30,505 cr.

₦9,505 cr.

₦9,505 dr.

₦30,500 dr.

Answer Details

To calculate Abu's balance at the end of the month, we need to add up all the cash he paid and all the credit he received, and then subtract that total from the amount he owed at the start of the month. First, Abu paid ₦40,005 in cash, which we can subtract from the amount he owed: ₦10,500 - ₦40,005 = ₦-29,505 This means that Abu has overpaid by ₦29,505. However, we also need to consider the additional credit sales of ₦20,000 that Abu received during the month. Adding the credit to the overpaid amount: ₦29,505 + ₦20,000 = ₦49,505 So, Abu's balance at the end of the month is ₦49,505 credit. Therefore, the correct answer is ₦30,505 cr.

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Read lesson note on Principles Of Double Entry (JAMB)

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 30 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & Dr & Dr & \text{Balance}\\ \hline & ₦ & ₦ & ₦ \\ \text{2/1/06 Balance b/d} & & & 2,000 \\ \text{3/1/06 '23456'} & 500 & & 1,500\\ \text{4/1/06 Deposit} & & 1,000 & 2,500\\ \text{5/1/06 Deposit} & & 1500 & 4,000\\ \text{6/1/06 '23457'} & 3,000 & & 1,000\end{array}\)
Total withdrawal is

₦3,500

₦2,500

₦2,000

₦1,000

Answer Details

To find the total withdrawals, we need to calculate the balance after each transaction and see how much it has decreased from the previous balance. Starting balance (2/1/06): ₦2,000 3/1/06: ₦2,000 - ₦500 = ₦1,500 4/1/06: ₦1,500 5/1/06: ₦1,500 6/1/06: ₦1,500 - ₦3,000 = -₦1,500 Since the balance is negative at the end, it means there were more withdrawals than deposits. To find the total withdrawals, we take the absolute value of the final balance: Total withdrawals = ₦1,500 Therefore, the correct answer is ₦3,500.

Read lesson note on Cashbook (JAMB)

Cashbook

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Question 31 Report

In the absence of an agreement, partners share profits

based on activeness of a partner

based on capital contribution

on patronage basis

on equal basis

Answer Details

In the absence of an agreement, partners share profits on an equal basis. This means that each partner is entitled to an equal share of the profits, regardless of their level of activity or capital contribution. This is known as the principle of equal sharing, which is the default rule in the absence of a partnership agreement specifying otherwise. It is important for partners to have a written agreement that specifies how profits will be divided, as well as other important terms such as the duties and responsibilities of each partner, how disputes will be resolved, and how the partnership can be dissolved.

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Partnership Accounts

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Question 32 Report

The petty cash book has

a debit balance only

a credit balance only

a nill balance only

both debit and credit balances

Answer Details

The petty cash book is a ledger that records small transactions and expenses made in cash by a company. It has both debit and credit balances because it records cash payments made (debit) and cash received (credit) for small expenses such as stationery, postage, and other miscellaneous expenses. Therefore, the correct answer is "both debit and credit balances."

Read lesson note on Cashbook (JAMB)

Cashbook

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Question 33 Report

As evidence of payment to a government treasury, revenue collectors issue

treasury card

receipt voucher card

treasury receipt

payment voucher

Answer Details

Revenue collectors issue treasury receipts as evidence of payment to a government treasury. Treasury receipts are official documents that show that a payment has been made to the government. They are usually issued by government revenue offices or tax collectors and contain details such as the amount paid, the purpose of the payment, and the date of the payment. Treasury receipts are important documents that can be used for accounting, auditing, and legal purposes. They serve as proof of payment and can be used to reconcile accounts, track revenue collections, and verify payments made to the government.

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Nature And Significance Of Accounting

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Question 34 Report

A debenture holder is a

creditor

promoter

debtor

shareholder

Answer Details

A debenture holder is a creditor. A debenture is a type of bond or loan issued by a company, government or organization. Debenture holders are individuals or entities that have provided loan capital to the issuing entity, in return for regular interest payments and repayment of the principal at a specified time. As a result, debenture holders are considered creditors of the issuing entity, rather than shareholders or promoters.

Read lesson note on Cashbook (JAMB)

Read lesson note on Nature And Significance Of Accounting (JAMB)

Cashbook

Nature And Significance Of Accounting

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Question 35 Report

A document which acknowledge that a company owes a person a stated sum of money with an agreement to pay a fixed rate of interest periodically is

share certificate

allotment certificate

preference certificate

debenture certifate

Answer Details

A debenture certificate is a document that acknowledges that a company owes a person a stated sum of money with an agreement to pay a fixed rate of interest periodically. It is a type of long-term debt instrument that companies issue to raise funds from the public. When an individual buys a debenture, they are essentially lending money to the company. The company is obligated to pay interest on the debenture at a predetermined rate and return the principal amount at the end of the maturity period. A debenture certificate serves as proof of the company's debt to the holder of the certificate.

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Nature And Significance Of Accounting

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Question 36 Report

As a basis for assessing future usage, fixed assets are shown at

selling price

cost price

cost plus residual value

net book value

Nature And Significance Of Accounting

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Question 37 Report

The total debtors account of trading concern is N13,000. out of this 2% is irrecoverable, 5% of the balance is not like to be collected. What is the provision for doubtful debts?

N910

N650

N637

N260

Provisions And Reserves

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Question 38 Report

An article cost N1,800 and is sold at a gross profit of 20% on selling price. What is the selling price?

₦2,250

₦2,160

₦1,800

₦1,440

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 39 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & D\\ \hline \text{Purchase of raw materials} & 236,500\\ \text{Returns of raw materials} & 4,750\\ \text{Carriage on raw materials} & 44,000\\ \text{Stock of raw materials at close} & 39,500 \\ \text{Factory fuel} & 150,000\\ \text{Direct wages} & 205,000\\ \text{Indirect wages} & 31, 250\\ \text{Factory power} & 3105,000\\ \text{Work-in-progress at start} & 32,500\end{array}\)
What is the value of raw materials used?

D 270,500

D 286,250

D 255,000

D 236,250

Answer Details

The value of raw materials used in production can be calculated by subtracting the closing stock of raw materials from the total cost of raw materials purchased, after adjusting for returns and adding the cost of carriage on raw materials. The calculation can be done as follows: Total cost of raw materials purchased = D236,500 Less: Returns of raw materials = D4,750 Add: Carriage on raw materials = D44,000 Net cost of raw materials purchased = D275,750 Less: Closing stock of raw materials = D39,500 Value of raw materials used = D236,250 Therefore, the value of raw materials used is D236,250. The correct option is: - D 236,250

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Manufacturing Accounts

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Question 40 Report

Which of the following is found in a Sales Ledger Account?

credit purchases

bill payable

discount received

discount allowed

Ethics In Accounting

Cashbook

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Question 41 Report

Subscription prepared by members is recorded in the balance sheet of a club as a

current liability

current asset

fixed asset

long term liability

Answer Details

Subscription prepared by members is recorded in the balance sheet of a club as a current liability. A current liability is a financial obligation that a company or organization is obligated to pay off within a year or an operating cycle, whichever is longer. Subscription prepared by members represents the amount of money that the club members have paid in advance for future services or events. As these services or events will be provided in the future, the subscription is recorded as a liability because the club is yet to fulfill its obligation to the members. Hence, subscription prepared by members is shown on the liability side of the club's balance sheet until the services or events are provided, at which point it will be recognized as revenue.

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Read lesson note on Partnership Accounts (JAMB)

The Final Accounts Of A Sole Trader/proprietorship

Partnership Accounts

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Question 42 Report

Abu, a debtor to Dania, owed ₦10,500 at the start of the month. He paid cash of ₦40,005 during the month and received additional credit sales of ₦20,000.Using the information, In Dania's books, to record the payment of ₦30,505 cr.40,005 by Abu

debit cash account, credit Abu's account

debit Abu's account, credit cash account

debit cash account, credit sales account

debit sales account, credit cash account,

Cashbook

Nature And Significance Of Accounting

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Question 43 Report

Programs installed in computers to facilitate processing of data are

hardwares

software

magnetic tapes

diskettes

Answer Details

Programs installed in computers to facilitate processing of data are called software. Software refers to the set of instructions or programs that run on a computer system, allowing the computer to perform specific tasks or functions. Examples of software include operating systems, applications, utilities, and games. Unlike hardware, which consists of physical components that can be touched, software is intangible and can be stored on a variety of media, such as hard drives, CDs, DVDs, and flash drives.

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Information Technology In Accounting

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Question 44 Report

The document making a public offer for he sale of a company's share is

memorandum of association

articles of association

prospectus

certificate of registration

Answer Details

A prospectus is a document that a company issues to the public when it is making an offer for the sale of its shares. It provides information about the company's operations, financial statements, management, and other relevant information that may be of interest to investors. A prospectus is an important document as it helps potential investors to make informed decisions about whether or not to invest in a company. Therefore, the correct option is 'prospectus'.

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Introduction To Company Accounts

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Question 45 Report

S. Sule sets aside from his private funds ₦20.000 is referred to as

drawings

capital

loan

profit

The Final Accounts Of A Sole Trader

Partnership Accounts

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Question 46 Report

The depreciation on plant acquired by a manufacturing company is treated as

prime cost

administrative expenses

factory overhead

selling and distribution expenses

Answer Details

The depreciation on plant acquired by a manufacturing company is treated as factory overhead. Depreciation is the gradual decrease in the value of an asset due to wear and tear, aging, and obsolescence over time. In a manufacturing company, the plant is a major asset that is used in the production process. The depreciation on plant is a cost that is incurred in the production of goods and is therefore treated as a factory overhead cost. This cost is allocated to the cost of goods sold and ultimately impacts the profitability of the manufacturing company.

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Manufacturing Accounts

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Question 47 Report

Which of the following is debited to partner's current account?

capital

interest on capital

drawings

share of profit

Answer Details

Drawings are debited to partner's current account. Explanation: A partner's current account is a record of transactions between the partner and the partnership. Drawings are the amounts of money that a partner takes out of the partnership for personal use. Since the drawings represent a withdrawal of cash or assets from the partnership by the partner, they are debited to the partner's current account. In other words, the partner's current account is credited for the amount of the drawings, indicating that the partner owes this amount to the partnership.

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Partnership Accounts

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Question 48 Report

Prepayment is treated in the balance sheet of firm as a

fixed asset

long-term liability

current asset

current liability

Answer Details

A prepayment is an advance payment for goods or services that have not yet been received. It is treated as a current asset in the balance sheet of a firm because it represents a future economic benefit that the firm will receive within the next 12 months. Once the goods or services are received, the prepayment is converted to an expense in the income statement.

Read lesson note on Provisions And Reserves (WAEC)

Provisions And Reserves

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Question 49 Report

"Financial statements do not a disclose all information users need to know about a firm" This is the concept of

consistency

money measurement

dual aspect

materiality

Accounting Concepts

Principles Of Double Entry

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Question 50 Report

Which of the following is not part of the cost of production

wages of operators

factory power

advertising

cost of raw materials

Answer Details

Advertising is not part of the cost of production. Cost of production refers to the cost incurred in the process of manufacturing or producing goods or services. It includes expenses such as wages of operators, factory power, cost of raw materials, and other costs directly associated with the production process. Advertising, on the other hand, is a promotional activity that aims to create awareness and generate demand for products or services. It is an indirect cost that is not directly related to the production process and hence not considered as part of the cost of production.

Read lesson note on Manufacturing Accounts (JAMB)

Read lesson note on Stock Valuation (JAMB)

Manufacturing Accounts

Stock Valuation

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