WAEC SSCE - Financial Accounting - 1996 (Objective)

Question 1 Report

Discount allowed is a charge made against

trading account

profit and loss acount

approration account

current account

nominal account

Nature And Significance Of Accounting

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Question 2 Report

Which of the following does not belong to the group?

furniture and fittings

plant and machinery

building

debtors

general reserve

Stock Valuation

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Question 3 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Fixed assets} & 12,000 \\ \text{Current assets} & 5,000 \\ \text{Current liabilities} & 2,300 \\ Capital & 10,000 \\ \text{Long term liabilities} & 4,700\end{array}$
What is the total net assets?

N17,300

N17,000

N15,000

N14,700

N12,000

The Accounting Equation And Double Entry Principle

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Question 4 Report

Which of the following fixed assets is not depreciable?

building

tools

land

Motor van

Furniture

Answer Details

Land is the fixed asset that is not depreciable. Land is considered a fixed asset because it is a long-term asset that a company holds for its operations or future use. However, land does not have a limited useful life and its value is not expected to decline over time, therefore, it cannot be depreciated. Buildings, tools, motor vans, and furniture are examples of fixed assets that are depreciable because they have a limited useful life and their value decreases over time.

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Nature And Significance Of Accounting

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Question 5 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Fixed assets} & 12,000 \\ \text{Current assets} & 5,000 \\ \text{Current liabilities} & 2,300 \\ Capital & 10,000 \\ \text{Long term liabilities} & 4,700\end{array}$
The working capital is

N10,000

N9,700

N7,300

N7,000

N2,700

Answer Details

Working capital is the difference between current assets and current liabilities of a company. Current assets = N5,000 Current liabilities = N2,300 Working capital = Current assets - Current liabilities = N5,000 - N2,300 = N2,700 Therefore, the working capital is N2,700. Option (E) is the correct answer.

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Question 6 Report

The total debtors account of a trading concern is N13,000. Out of this 2 percent is irrecoverable; 5 percent of the balance is unlikely to be collected. Bad debts is

N910

N650

N637

N377

N260

Incomplete Records And Single Entry

Nature And Significance Of Accounting

Provisions And Reserves

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Question 7 Report

A trial balance is

an attempt to balance the accounts

the credit balances of the accounts

list of all balances extracted from the ledger

the debit balances of the accounts

balance sheet balances

Answer Details

A trial balance is a list of all the accounts and their balances (either debit or credit) extracted from the ledger. The purpose of a trial balance is to ensure that the total of all the debit balances equals the total of all the credit balances. If the trial balance is in balance, it means that the accounts have been properly recorded and that the books are mathematically correct. However, if the trial balance does not balance, it means there is an error in the accounting records that needs to be corrected before the financial statements can be prepared.

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 8 Report

The total debtors account of a trading concern is N13,000. Out of this 2 percent is irrecoverable; 5 percent of the balance is unlikely to be collected. What is the provision for doubtful debts?

N910

N650

N637

N377

N260

Provisions And Reserves

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Question 9 Report

Use the following to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Provision for bad debts} & 1,000 Cr \\ \text{Bad debts} & 500Dr \\ debtors & 50,000Dr \\ \text{Additional bad debts to be written off} & 500 \end{array}$
New provision for bad debts to stand at 5% of debtors. In the balance sheet, the net figures for the profit is

N47,025

N46,550

N45,600

N45,500

N43,225

Provisions And Reserves

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Question 10 Report

An equipment costing N60,000 was bought on 1st January 1991. Depreciation was provided at 20 percent annually on straight line method. It was straight line method. it was sold on 30th June 1994 for N15,750. The net book value of the equipment at the time sale was

N48,000

N36,000

N30,000

N24,000

N12,000

Provisions And Reserves

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Question 11 Report

Payment is shown in the Balance Sheet as

Current asset

liability

capital

fixed asset

investment

Answer Details

Payments are shown on the balance sheet as a current asset if they have been made but not yet used or consumed. For example, if a company has paid for inventory that has not yet been sold, this payment would be shown on the balance sheet as a current asset called "inventory." Payments can also be shown as a liability if they are payments that the company owes to others, such as accounts payable or loans payable. In general, the classification of payments on the balance sheet will depend on the specific nature of the payment and how it relates to the company's overall financial position. Therefore, the answer to the question cannot be determined without additional information.

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Nature And Significance Of Accounting

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Question 12 Report

Which of the following is used before the appropriation bill is approved?

supplementary general warrant

provisional general warrant

reserved expenditure warrant

virement warrant

supplementary statutory expenditure warrant

Public Sector Accounting

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Question 13 Report

The cash realized from the sale of asset on dissolution of partnership is

debited to cash account and credit to asset account

credited to cash account and debited to asset account

debited to cash account and credited realisation account and credited to realisation account

credited to cash account and debited to realisation account

debited to realisation account abnd credited to asset account

Partnership Accounts

Nature And Significance Of Accounting

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Question 14 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Fixed assets} & 12,000 \\ \text{Current assets} & 5,000 \\ \text{Current liabilities} & 2,300 \\ Capital & 10,000 \\ \text{Long term liabilities} & 4,700\end{array}$
What is the total assets?

N17,300

N17,000

N15,000

N14,700

N12,000

Answer Details

To find the total assets of the company, we need to add the fixed assets and current assets. Fixed assets = N12,000 Current assets = N5,000 Total assets = Fixed assets + Current assets Total assets = N12,000 + N5,000 Total assets = N17,000 Therefore, the total assets of the company are N17,000. The correct answer is.

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Question 15 Report

which of the following is not an Appropriation account item for a company?

inerest on drawings

proposed dividends

interim dividends

provision for taxation

General reserve

Answer Details

An Appropriation account is an account that is used to allocate profits and losses to different reserves or funds. The purpose of this account is to ensure that the company's profits are properly allocated to various purposes, such as paying dividends or creating reserves for future use. Out of the options provided, "Interest on drawings" is not an Appropriation account item for a company. Interest on drawings is typically recorded in the Profit and Loss account, which is used to show the company's income and expenses over a particular period. It is not related to the allocation of profits to various reserves or funds, which is the main purpose of an Appropriation account.

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Partnership Accounts

Provisions And Reserves

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Question 16 Report

A payment of N150 to a credit

an increase in assets only

a reduction of assets only

a reduction in assets and liabilities

an increase in assets and liabilities

a reduction in the bank account

Answer Details

A payment of N150 to a credit would result in a reduction of assets and liabilities. When a payment is made to a creditor, it results in a decrease in the bank balance (reduction in assets) and also reduces the amount owed to the creditor (reduction in liabilities). So, it affects both the asset and liability side of the balance sheet. Therefore, the correct answer is "a reduction in assets and liabilities".

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Cashbook

Nature And Significance Of Accounting

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Question 17 Report

The payee of a cheque is the

drawer's banker

drawee's banker

person naned to receive the amount on the cheque

bank cashier

drawer

Answer Details

The payee of a cheque is the person named to receive the amount on the cheque. In simpler terms, the payee is the person who is supposed to get the money that is written on the cheque. For example, if someone writes a cheque for $100 and names John as the payee, then John is the person who should receive the $100 when the cheque is cashed.

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Nature And Significance Of Accounting

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Question 18 Report

Which of the following is not charged to Manufacturing Account?

raw materials

factory's wages

Distribution expenses

royalties

Cashbook

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Question 19 Report

Which of the following is used where virement is not possible and where an application for additional provision reveals a degree of urgency?

reserved expenditure warrant

provisional general warrant

contigncie warrant

supplementary general warrant

virement warrant

Answer Details

The answer is "contingency warrant." A contingency warrant is used when virement, which is the transfer of funds from one budget heading to another, is not possible or practicable. It is also used when there is an urgent need for additional provision, but the normal procedure of obtaining authority would cause undue delay. Contingency warrants are issued by the Treasury or other relevant authority and are subject to strict limits and conditions. They allow the relevant department or agency to spend money for a specific purpose within a certain time frame. The use of contingency warrants is closely monitored to ensure that they are used appropriately and in accordance with the relevant regulations and procedures.

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Provisions And Reserves

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Question 20 Report

Use the following to answer the given question
UCHENNA ENTERPRISES: Balance sheet as at 31st December, 1993
$\begin{array}{c|c} & N & N & & N \\ \hline Capital & 84,000 & & \text{Land and building} & 45,000 \\ \text{Add net profit} & 15,000 & 99,000 & \text{Furniture and Fittings} & 34,000 \\ \text{Less drawings} & & 9,000 & Stock & 28,000 \\ & & \overline{90,000} & debtors & 22,000 \\ debtors Creditors & & 25,000 & cash & 1,000 \\ Accruals & & 15,000 & & \\ & & \overline{130,000} & & \overline{130,000} \end{array}$
Current assets amount to

N51,000

N50,000

N23,000

N22,000

N11,000

Answer Details

To find the current assets, we need to add up the stock, debtors, and cash. Stock + Debtors + Cash = N28,000 + N22,000 + N1,000 = N51,000 Therefore, the current assets amount to N51,000.

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The Final Accounts Of A Sole Trader

Principles Of Double Entry

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Question 21 Report

The portion of the authorizes capital which has been allotted to members is

uncalld capital

paid-up capital

issued capital

authorized capital

unissued capital

Partnership Accounts

The Accounting Equation And Double Entry Principle

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Question 22 Report

An equipment costing N60,000 was bought on 1st January 1991. Depreciation was provided at 20 percent annually on straight line method. It was straight line method. it was sold on 30th June 1994 for N15,750. In the year of sale, profit was

reduced by N15,750

increased by N15,750

reduced by N12,000

increased by N2,250

reduced by N2,250

Provisions And Reserves

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Question 23 Report

The purpose of a trading account is to ascertain

sales

gross profit or loss

net profit or loss

carriage outwarrds

appropriated profit

Answer Details

The purpose of a trading account is to ascertain the gross profit or loss of a business during a specific period of time. It includes all direct expenses such as the cost of goods sold and all direct revenues such as sales revenue. The trading account serves as an intermediary step towards calculating the net profit or loss of the business, as it only includes direct expenses and revenues, and excludes indirect expenses and revenues such as overheads and interest. By subtracting the cost of goods sold from the sales revenue, the trading account determines the gross profit or loss of the business.

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 24 Report

Which of the following is not a cause for the difference between bank statement balance and cash book balance?

bank charges

presented cheque

direct transfer

standing order

uncredited logements

Bank Transactions And Reconciliation Statements

Cashbook

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Question 25 Report

Mr. B sod goods worth N200 on credit to Mr. C. The credit sales should be entered into

sales day book

trading account

profit and loss account

purchases day book

Mr. B's Account

Answer Details

The credit sales made by Mr. B to Mr. C should be entered into the Sales Day Book. The Sales Day Book is a subsidiary book used to record credit sales made by the business. It contains information such as the date of sale, the name of the customer, the amount of the sale, and any applicable taxes. The Sales Day Book is an important record for a business to keep track of its credit sales, as it provides a summary of all sales made on credit during a particular period.

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Cashbook

Nature And Significance Of Accounting

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Question 26 Report

The person who has applied for shares in a company is called

allotee

subscriber

promoter

shareholder

applicant

Partnership Accounts

Introduction To Company Accounts

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Question 27 Report

A document which acknowledges that a company owes a named person a stated sum of money with the promise that a stated interest rate will be paid periodically is called

share certificate

preference certificate

debenture certificcate

allotment certificate

call certificate

Answer Details

A document which acknowledges that a company owes a named person a stated sum of money with the promise that a stated interest rate will be paid periodically is called a debenture certificate. Debentures are long-term loan instruments issued by a company that carry a fixed rate of interest and are usually secured against the assets of the company. The holder of a debenture is a creditor of the company, and the company is obligated to repay the principal amount of the debenture along with the interest as per the terms of the debenture certificate.

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Partnership Accounts

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Question 28 Report

Use the following to answer the given question
UCHENNA ENTERPRISES: Balance sheet as at 31st December, 1993
$\begin{array}{c|c} & N & N & & N \\ \hline Capital & 84,000 & & \text{Land and building} & 45,000 \\ \text{Add net profit} & 15,000 & 99,000 & \text{Furniture and Fittings} & 34,000 \\ \text{Less drawings} & & 9,000 & Stock & 28,000 \\ & & \overline{90,000} & debtors & 22,000 \\ debtors Creditors & & 25,000 & cash & 1,000 \\ Accruals & & 15,000 & & \\ & & \overline{130,000} & & \overline{130,000} \end{array}$
Capital employed is

N130,000

N115,000

N99,000

N90,000

N84,000

The Final Accounts Of A Sole Trader

Principles Of Double Entry

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Question 29 Report

Use the following to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Provision for bad debts} & 1,000 Cr \\ \text{Bad debts} & 500Dr \\ debtors & 50,000Dr \\ \text{Additional bad debts to be written off} & 500 \end{array}$
New provision for bad debts to stand at 5% of debtors. The total amount of bad debts to be charges as expense in the profit and Loss Account is

N2,500

N2,000

N1,500

N1,200

N1,000

Provisions And Reserves

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Question 30 Report

Which of the following is no part of prime cost of production?

cost raw materials

carriage on raw materials

direct expenses

direct wages

depreciation of factory equipment

Answer Details

Depreciation of factory equipment is not a part of the prime cost of production. Prime cost is the sum of all direct costs involved in the production of goods or services, which includes the cost of raw materials, direct expenses, direct wages, and any other expenses that are directly attributable to the production process. Depreciation, on the other hand, is a non-cash expense that reflects the gradual decrease in value of the factory equipment over its useful life. It is considered an indirect cost because it does not directly contribute to the production process. Therefore, depreciation of factory equipment is not included in the calculation of prime cost.

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Stock Valuation

Nature And Significance Of Accounting

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Question 31 Report

Which of the following are examples of Nominal account?

land and insurance

cash and interest

building and cash

machinery and wages

rent and discount

Ethics In Accounting

Nature And Significance Of Accounting

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Question 32 Report

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

dividend received received on behalf of customers

bank charges

insurance premium paid on behalf of customers

dishonoured chques

uncredied charges

Cashbook

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Question 33 Report

Use the following to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Stock 1/1/93} & 4,500 \\ Sales & 13,500\\ Purchases & 5,000 \\ \text{Carriage inwards} & 500 \\ \text{Stock 31/12/93} & 4,200 \\ \text{Return inwards} & 600\end{array}$
Cost of sales is

N10,000

N9,500

N5,800

N5,300

N5,200

Stock Valuation

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Question 34 Report

Which of the following is not a debit entry in the Bought Ledger?

cash

discount received

purchases

returns outeards

bills payable

Nature And Significance Of Accounting

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Question 35 Report

A sales journal is used to record

sales expenses

cash sales

credit sales

sales return

sales commission

Answer Details

A sales journal is used to record all credit sales of a business. A credit sale is a transaction in which the buyer does not make an immediate payment, but instead agrees to pay the seller at a later date. The sales journal records all of these credit sales, including the names of the customers, the date of the sale, the amount of the sale, and any applicable taxes. The sales journal is important because it allows businesses to keep track of all credit sales and to monitor customer accounts. It also makes it easier for businesses to prepare financial statements and to calculate taxes. Cash sales, sales returns, sales commissions, and sales expenses are not recorded in the sales journal. Cash sales are recorded in the cash receipts journal, sales returns are recorded in the sales returns and allowances journal, sales commissions are recorded in the general journal, and sales expenses are recorded in the general journal or in specific expense journals such as the advertising expense journal.

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Cashbook

Principles Of Double Entry

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Question 36 Report

Use the following to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Stock 1/1/93} & 4,500 \\ Sales & 13,500\\ Purchases & 5,000 \\ \text{Carriage inwards} & 500 \\ \text{Stock 31/12/93} & 4,200 \\ \text{Return inwards} & 600\end{array}$
Gross profit is

N8,300

N8,200

N7,700

N7,600

N7,100

Stock Valuation

Cashbook

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Question 37 Report

Use the following to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Stock 1/1/93} & 4,500 \\ Sales & 13,500\\ Purchases & 5,000 \\ \text{Carriage inwards} & 500 \\ \text{Stock 31/12/93} & 4,200 \\ \text{Return inwards} & 600\end{array}$
Net sales is

N14,100

N14,000

N13,500

N12,900

N9,300

Nature And Significance Of Accounting

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Question 38 Report

An equipment costing N60,000 was bought on 1st January 1991. Depreciation was provided at 20 percent annually on straight line method. It was straight line method. it was sold on 30th June 1994 for N15,750. Its accumulated depreciation provision provision at the time of sale was

N48,000

N42,000

N36,000

N24,000

N12,000

Manufacturing Accounts

Nature And Significance Of Accounting

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Question 39 Report

Which of the following is a charge against profit?

ordinary dividend

general reserve

preference dividend

debenture interest

revenue reserve

Partnership Accounts

The Final Accounts Of A Sole Trader/proprietorship

Ethics In Accounting

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Question 40 Report

Use the following to answer the given question
UCHENNA ENTERPRISES: Balance sheet as at 31st December, 1993
$\begin{array}{c|c} & N & N & & N \\ \hline Capital & 84,000 & & \text{Land and building} & 45,000 \\ \text{Add net profit} & 15,000 & 99,000 & \text{Furniture and Fittings} & 34,000 \\ \text{Less drawings} & & 9,000 & Stock & 28,000 \\ & & \overline{90,000} & debtors & 22,000 \\ debtors Creditors & & 25,000 & cash & 1,000 \\ Accruals & & 15,000 & & \\ & & \overline{130,000} & & \overline{130,000} \end{array}$
Working capital amounts to

N51,000

N50,000

N23,000

N22,000

N11,000

Answer Details

Working capital refers to the amount of funds available for the day-to-day operations of a business. It is calculated as the difference between current assets and current liabilities. In this case, the current assets are the sum of stock, debtors, and cash, which is N28,000 + N22,000 + N1,000 = N51,000. The current liabilities are the sum of creditors and accruals, which is N25,000 + N15,000 = N40,000. Therefore, the working capital is N51,000 - N40,000 = N11,000. So, the answer is (E) N11,000.

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Nature And Significance Of Accounting

Principles Of Double Entry

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Question 41 Report

Impersonal Accounts contain

real and cash accounts

capital and nominal accounts

real and normal accounts

investment and real accounts

interest received and real account

Accounting Concepts

Nature And Significance Of Accounting

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Question 42 Report

Which of the following is the book of original entry for all payments and receipts whether by cash or cheque?

sales day book

purchases day book

cash book

cheque book

journal book

Answer Details

The book of original entry for all payments and receipts whether by cash or cheque is the cash book. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. It serves as the primary ledger for recording all financial transactions in cash or through bank accounts. Transactions are recorded in chronological order, and the cash book is reconciled regularly with bank statements to ensure accuracy. Therefore, option C, cash book, is the correct answer.

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Cashbook

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Question 43 Report

Mr. B sod goods worth N200 on credit to Mr. C. Mr. B should debit this to

profit and loss account

manufacturing account

sales account

Mr. C's account

Mr. B's account

Answer Details

Mr. B should debit this transaction to Mr. C's account. Debit means an entry on the left side of an account, and it represents an increase in assets, expenses, or a decrease in liabilities, equity, or revenue. In this case, when Mr. B sold goods worth N200 to Mr. C on credit, it means that Mr. C owes Mr. B N200, and the amount receivable from Mr. C is an asset for Mr. B. Therefore, to record this transaction, Mr. B should make the following journal entry in his books of accounts: Mr. C's Account Dr. N200 To Sales Account N200 Here, Mr. C's account is debited with N200, which represents an increase in the amount receivable from Mr. C, and the sales account is credited with N200, which represents an increase in sales revenue for Mr. B. Hence, option (D) Mr. C's account is the correct answer.

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Cashbook

Nature And Significance Of Accounting

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Question 44 Report

Discount received is shown in the

credit side of sales ledger balances

debit side f bought ledger balances

credit side of bought ledger balances

debit side of sales ledger balances

sales ledger balances as contra entry

Cashbook

Control Accounts And Self-balancing Ledgers

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Question 45 Report

The balance sheet is a statement showing

all assets and liabilities

all balances

credit entries of the business

debit entries of the business

caoital and liabilities

Answer Details

The balance sheet is a statement showing all assets and liabilities of a business at a particular point in time, usually the end of the accounting period. It is a financial statement that provides a snapshot of a company's financial position by listing the assets owned by the business, the amounts owed to creditors (liabilities), and the owner's investment in the business (capital). The purpose of a balance sheet is to give an overall picture of the financial health of a company and to help users, such as investors and creditors, make informed decisions about the business.

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

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Accounting For Value Added Tax

Nature And Significance Of Accounting

Principles Of Double Entry

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Question 46 Report

Use the following information to answer the given question
$\begin{array}{c|c} & N \\ \hline \text{Fixed assets} & 12,000 \\ \text{Current assets} & 5,000 \\ \text{Current liabilities} & 2,300 \\ Capital & 10,000 \\ \text{Long term liabilities} & 4,700\end{array}$
Total liabilities amount to

N17,000

N14,700

N12,300

N7,000

N4,700

Answer Details

To find the total liabilities, we need to add the current liabilities and the long-term liabilities. Current liabilities = N2,300 Long-term liabilities = N4,700 Total liabilities = Current liabilities + Long-term liabilities Total liabilities = N2,300 + N4,700 Total liabilities = N7,000 Therefore, the correct answer is N7,000.

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Accounting For Value Added Tax

The Accounting Equation And Double Entry Principle

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Question 47 Report

Factory wages are always entered into the

sales account

manufacturing account

profit ans loss account

trading account

purchases account

Answer Details

Factory wages are always entered into the manufacturing account. The manufacturing account is a part of the cost accounting system that records all direct costs associated with the production process, including direct materials, direct labor, and manufacturing overhead. Factory wages are a type of direct labor cost that is directly incurred in the production process. Therefore, it is recorded in the manufacturing account along with other direct costs. The manufacturing account is used to calculate the cost of goods produced by a company during a specific period, which is then transferred to the trading account and ultimately to the profit and loss account.

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Accounts Of Not-for-profit-making Organizations

Cashbook

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Question 48 Report

Debentures issued at a price above the nominal value are said to be issued

at discount

at premium

at subsidy

on goodwill

at a loss

Answer Details

Debentures issued at a price above the nominal value are said to be issued "at premium". A debenture is a type of bond or loan security issued by a company. The nominal value, also known as face value or par value, is the value of the debenture when it is first issued. If the debenture is issued at a price that is higher than its nominal value, it is said to be issued at a premium. This means that investors are willing to pay more than the face value of the debenture because they believe that it offers a better return than other investments. The opposite of issuing at a premium is issuing at a discount, which means that the debenture is issued at a price lower than its nominal value.

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Nature And Significance Of Accounting

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Question 49 Report

Which of the following entries would be made for goods bought and paid for immediately? Debit

cash account, credit sales account

purchases account; credit cash account

cash account; credit purchases account

purchases account; credit sales account

purchases account; credit goods account

Ethics In Accounting

Cashbook

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