WAEC SSCE - Financial Accounting - 1990 (Objective)

Use the following information to answer the given question:
\(\begin{array}{c|c} & N \\ \hline \text{Stock at 1st Jan. 1901} & 6,500 \\ \text{Stock at 31st Dec. 1901} & 5,500 \\ \text{Creditors at 1st Jan. 1901} & 4,000 \\ \text{Creditors at 31st December 1901} & 5,000 \\ \text{cash paid for goods during the year} & 20,000 \\ \text{Gross profit} & \text{25% on cost} \\ \text{Administrative and selling expenses} & 2,750
\end{array}\)
The purchases for the year is

N20,000

N21,000

N22,000

N24,000

N25,000

Answer Details

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Question 5 Report

The salary of a shop keeper who sells goods would be charged in the

balance sheet

sales account

profit and loss account

trading account

manufacturing account

Answer Details

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Question 6 Report

Commission received is entered on the

credit side of the profit and loss account

credit side of the trading account

credit side of the cash book

debit side of the profit and loss account

debit side of thetrading account

Answer Details

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Question 7 Report

Use the following information to answer the given question:
\(\begin{array}{c|c} \text{Date of delivery} & customer & \text{Gross amount N} & \text{Trade discount %} & \text{Cash Discount %} & \text{Terms of payment} \\ \hline \text{4/1/86} & \text{Mr. A.F.P} & 12,000 & 15 & 10 & \text{30 days of delivery}
\end{array}\)
The amount of discount in the ledger is

N10,200

N2,820

N1,800

N1,200

N1,020

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Question 8 Report

Which of the following is true of the uses of the journal proper? i. correction of errors. ii. opening and closing the accounting books iii. recording cash purchases

iii

i and ii

i and iii

Answer Details

The journal proper is a book of prime entry used for recording infrequent or non-routine transactions that cannot be recorded in any other specialized journal. Out of the options provided, "i" and "iii" are true of the uses of the journal proper. The correction of errors is one of the primary uses of the journal proper. When errors are made in the original accounting records, the journal proper is used to make the necessary adjustments to correct these errors. Recording cash purchases is also a use of the journal proper. When a business makes a cash purchase, and there is no specialized journal for recording such a transaction, the journal proper is used. However, opening and closing the accounting books are not uses of the journal proper. The opening and closing entries are made in the general journal, which is a separate book of prime entry used for recording adjusting and closing entries. Therefore, the correct answer is "i and iii".

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Question 9 Report

The sales day book will show goods sold

for cash and credit

for cash

on credit

to wholwsalers

to retailers

Answer Details

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Question 10 Report

Which of the these entries is wrong
PURCHASES ACCOUNT
\(\begin{array}{c|c} & N & & N \\ \hline \text{A. Balance b/f} & 130 & \text{E. Balance c/d} & 1,030 \\ \text{B.Furniture} & 300 & & \\ \text{C. Cash} & 200 & & \\ \text{D. T.Ramoni} & 400 & & \\ \text{Total} & 1,030 & & 1,030
\end{array}\)

Answer Details

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Question 11 Report

Prof. Bush had two accounts with Olive Brother agreed to have only one balance outstanding. By which of the following methods could this be effected?

Journal entry

double entry

suspense account entry

adjustment entry

contra entry

Answer Details

The method that could be used to consolidate the two accounts of Prof. Bush with Olive Brother is a contra entry. A contra entry is a bookkeeping entry that offsets or cancels out an existing account balance. It is used when there are two accounts with opposite balances that need to be consolidated into one. In this case, since Prof. Bush has two accounts with Olive Brother, a contra entry could be used to consolidate the two balances into one. The contra entry involves transferring the balance of one account to the other account, effectively canceling out the balance of the first account. For example, if Prof. Bush has an outstanding balance of N10,000 in Account A and a balance of N8,000 in Account B, a contra entry can be made by transferring N8,000 from Account B to Account A, leaving a single balance of N18,000 in Account A. To summarize, a contra entry could be used to consolidate the two accounts of Prof. Bush with Olive Brother by transferring the balance of one account to the other account, effectively canceling out the balance of the first account. This would result in only one outstanding balance for Prof. Bush with Olive Brother.

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Question 12 Report

Use the following information to answer the given question: SALES LEDGER CONTROL ACCOUNTS
\(\begin{array}{c|c} & N & & N \\ \hline \text{Balance b/d} & ? & \text{Discount allowed} & 968 \\ \text{sales} & 21,610 & \text{Sales returns} & 942 \\ \text{Acceptance dishonoured} & 542 & \text{cash received from customers} & ? \\ & & \text{Balance c/d} & 13,740 \\ \text{Total} & 34,743 & \text{Total} & 34,742
\end{array}\)
What is the total debts at the end of the year?

N12,590

N13,740

N20,668

N21,610

N34,742

Answer Details

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Question 13 Report

N10,200

N2,820

N1,800

N1,200

N9,180

Answer Details

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Question 14 Report

Stock is N200 at start, and N320 at close purchases N2,055 and sales N3,189. The value of goods available for sale will be

3,186

N2,255

N2,175

N2,055

N1,935

Answer Details

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Question 15 Report

motor car costing N10,000 was depreciated at 20 per cent anuum by the diminishing balance method. Two years late, it was sold for N6,000. The net result of the sale was

N6,400 profit

N6,000 loss

N4,000 loss

N400 profit

N400 loss

Answer Details

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Question 16 Report

N19,092

N19,700

N20,668

N21,002

N21,610

Answer Details

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Question 17 Report

Abid and Onik were in partnership sharing profit in the ratio 3 : 2. Their respective capitals were N4,000 and N2,000 and their drawings N1,800 and N1,200. Profit during the year was N5,400; before 5% interest on capital. No interest was chargeable on drawings. What was the balance carried down on Abid's current account?

N940

N1,460

N2,040

N3,060

N3,600

Answer Details

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Question 18 Report

N27,500

N26,500

N25,500

N24,500

N22,000

Answer Details

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Question 19 Report

Cash discount received would be shown in the i. cash book ii. discount received account iii. supplier's account

i and iii

i, ii, and iii

iii

i and ii

ii and iii

Answer Details

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Question 20 Report

Which of the following should be included in the adjusted cash book?

bank charges and commission

cheques issued, presented and cashed

bank deposits

cash payments made by the firm

opening bank overdraft

Answer Details

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Question 21 Report

A credit note from a supplier for damaged goods would first be entered in the

purchase day book

sales day book

cash book

returns inwards book

returns outwards book

Answer Details

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Question 22 Report

25%

22%

21%

20%

10%

Answer Details

To calculate the percentage of net profit on sales, we need to find the net profit and divide it by the total sales. First, we need to calculate the cost of goods sold. We can do this by finding the difference between the stock at the beginning of the year and the stock at the end of the year, and adding to it the cash paid for goods during the year: Cost of goods sold = 6,500 - 5,500 + 20,000 = 21,000 Next, we can calculate the gross profit by multiplying the cost of goods sold by 25%: Gross profit = 21,000 x 25% = 5,250 To find the net profit, we need to subtract the administrative and selling expenses from the gross profit: Net profit = 5,250 - 2,750 = 2,500 Finally, we can calculate the percentage of net profit on sales by dividing the net profit by the total sales, which is the sum of the cost of goods sold and the gross profit: Percentage of net profit on sales = (2,500 / (21,000 + 5,250)) x 100% = 10% Therefore, the percentage of net profit on sales is 10%. In summary, we can calculate the percentage of net profit on sales by dividing the net profit by the total sales, which is the sum of the cost of goods sold and the gross profit. The percentage of net profit on sales for this problem is 10%.

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Question 23 Report

N1,020

N1,200

N10,800

N2,820

N10,200

Answer Details

The gross amount of the transaction is N12,000, and the trade discount is 15%. This means that the customer, Mr. A.F.P., is entitled to a discount of N1,800 (15% of N12,000). The terms of payment state that Mr. A.F.P. has 30 days to settle his account, and if he does so, he will also receive a cash discount of 10%. This means that he will receive a discount of N1,200 (10% of N12,000). Therefore, if Mr. A.F.P. settled his account after 30 days of delivery, he would receive a total discount of N3,000 (N1,800 + N1,200). This is, N10,800. In summary, Mr. A.F.P. would receive a trade discount of N1,800 and a cash discount of N1,200, totaling a discount of N3,000 if he settles his account after 30 days of delivery.

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Question 24 Report

N12,590

N13,740

N20,668

N21,610

N32,742

Answer Details

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Question 25 Report

Which of the following is not true of revenue expenditure? i. It is incurred in one period of account. ii. its full benefits are consumed in the period incurred. iii. it includes items for replacement and repairs iv. it does not include depreciation

i and ii

iii

Answer Details

The statement that is not true of revenue expenditure is "iii. it includes items for replacement and repairs". Revenue expenditure is the type of expenditure incurred in a business that is related to the day-to-day operations of the business and is aimed at maintaining the revenue-generating capacity of the business. It is usually incurred in one period of account and its full benefits are consumed in the period incurred. However, it does not include items for replacement and repairs since these are capital expenditures that are aimed at improving the revenue-generating capacity of the business over the long term. Therefore, option (iv) is not correct as it incorrectly implies that revenue expenditure includes depreciation, which is a non-cash expense that is used to allocate the cost of a long-term asset over its useful life.

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Question 26 Report

When precision for depreciation account is maintained, the annual charge for depreciation shall be

debited to the provision account and credited to profit and loss account

debited to the asset account and credited to profit and loss account

debited to profit and loss account and credited provision account

debited to the asset account and credited to the provisio account

debiited to theprovisiom account and credited to the asser account

Answer Details

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Question 27 Report

N13.200

N12,000

M10,800

N10,200

N9,180

Answer Details

The gross amount of the sale to Mr. A.F.P. is N12,000, and he is entitled to a trade discount of 15%. This means he will only have to pay 85% of the gross amount. Gross amount after Trade discount = Gross amount - Trade discount Gross amount after Trade discount = N12,000 - (15/100 x N12,000) Gross amount after Trade discount = N10,200 Next, Mr. A.F.P. is entitled to a cash discount of 10%. This means he will receive a discount of N1,020 if he pays within 30 days of delivery. Cash discount = Cash discount % x Gross amount after trade discount Cash discount = 10/100 x N10,200 Cash discount = N1,020 Therefore, the amount due from Mr. A.F.P. if he pays within 30 days of delivery would be: Amount due = Gross amount after trade discount - Cash discount Amount due = N10,200 - N1,020 Amount due = N9,180 However, if Mr. A.F.P. fails to settle his account in time, he will lose the cash discount of N1,020, and the full amount due would be N10,200. Therefore, if Mr. A.F.P. fails to settle his account in time, the amount due from him would be N10,200.

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Question 28 Report

N6,625

N6,250

N6,000

N5,500

N5,000

Answer Details

To find the gross profit for the year, we need to know the cost of goods sold (COGS) first, which can be calculated using the following formula: COGS = Beginning Inventory + Purchases - Ending Inventory We are given the beginning and ending stock levels, but we need to calculate purchases. We can use the information about cash paid for goods during the year to calculate this: Purchases = Cash Paid + Ending Accounts Payable - Beginning Accounts Payable Plugging in the given values, we get: Purchases = 20,000 + 5,000 - 4,000 = 21,000 Now we can calculate COGS: COGS = 6,500 + 21,000 - 5,500 = 22,000 Finally, we can use the gross profit percentage given to calculate the gross profit: Gross Profit = COGS x Gross Profit Percentage Gross Profit = 22,000 x 0.25 = N5,500 Therefore, the answer is option D: N5,500.

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Question 29 Report

Which of the following will not affect the agreement of the rial balance? i. compensating error ii. debiting an item instead of crediting it iii. making only a single entry

iii

ii and iii

i, ii ans iii

Answer Details

The rial balance is a type of accounting report that shows the total debits and credits for each account in a company's financial records. The agreement of the rial balance means that the total debits equal the total credits. Compensating errors occur when two or more errors cancel each other out, so the net effect is zero. These errors can affect individual accounts but do not affect the overall agreement of the rial balance since they offset each other. Debiting an item instead of crediting it, or vice versa, will affect the agreement of the rial balance because it will result in an imbalance between the total debits and total credits. Making only a single entry will also affect the agreement of the rial balance since it does not capture both the debit and credit aspects of a transaction, resulting in an imbalance between the total debits and total credits. Therefore, the option that will not affect the agreement of the rial balance is (i), compensating errors.

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Question 30 Report

Prime cost consist of

factory cost and cost of material

overhead cost and direct cost

direct expenses, direct labour and direct material

direct expenses and direct labour

cost of sale factory cost and cost of materials

Answer Details

Prime cost consists of direct expenses, direct labour, and direct material. Direct material refers to the cost of all materials that are used in the production process, including the cost of raw materials and any other materials that are used in the manufacturing process. Direct labour refers to the wages, salaries, and other expenses associated with the workers who are directly involved in the manufacturing process. Direct expenses refer to all expenses that can be traced back to the production process, such as the cost of utilities used in the manufacturing process or the cost of any equipment that is specifically used in the manufacturing process. In summary, prime cost is the total cost of direct expenses, direct labour, and direct material used in the manufacturing process.

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Question 31 Report

An overdraft is usually shown as a

credit balance in the cash column of the cash book

debit balance in the cash column of the cash book

debit balance in the loan account

credit balance in the bank column of the cash book

debit balance in the bank column of the cash book

Answer Details

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Question 32 Report

The trial balance will show return outwards account N60. discount allowed account N100, respectively as

N60 credit, N100 credit

N60 credit, N100 debit

N60 debit, N100 debit

N61 debit, N100 credit

N160 credit, N60 credit

Answer Details

Based on the information provided, the trial balance will show Return Outwards account N60 as a credit and Discount Allowed account N100 as a debit. Return Outwards account is used to record the value of goods that customers have returned to the business, so it has a normal credit balance. On the other hand, Discount Allowed account is used to record the discounts given to customers for early payment, and it has a normal debit balance. When these accounts are presented in the trial balance, they will be shown in the side opposite to their normal balance. Therefore, Return Outwards account will be shown as a credit, and Discount Allowed account will be shown as a debit. So the answer is: N60 credit, N100 debit.

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Question 33 Report

3 times

3.3 times

3.5 ttimes

4 times

Answer Details

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Question 34 Report

N940

N1,460

N2,040

N3,060

N3,600

Answer Details

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Question 35 Report

The balance of the pretty cash book should be

deducted from the balance of the cash account

shown in the balance sheet as cash-in-hand

reconciled with the bank balance

returned to the sales manager

shown in the balance sheet as liability

Answer Details

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Question 36 Report

The purchase of a typewriter for office use for N2,500 should be debited to

bank accoun

sales account

cash account

purchases account

assets account

Answer Details

The purchase of a typewriter for office use for N2,500 should be debited to the assets account. This is because an asset is something that a business owns and that has value, and the typewriter is a tangible asset that will be used by the business to generate revenue. The purchase of an asset is recorded as a debit to the assets account, and this will increase the value of the assets owned by the business. It's important to note that if the purchase was made using cash, the cash account would also be credited to show the decrease in the cash balance. However, the primary account to debit would still be the assets account.

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Question 37 Report

Carriage inwards is shown on the

debit side of the profit and loss account

credit side of the trading account

debit side of the trading account

credit side of the profi and loss account

debit side of the cash book

Answer Details

Carriage inwards refers to the transportation cost incurred by a business when purchasing goods from a supplier. It is a cost that is directly related to the purchase of goods and is therefore recorded as part of the cost of goods sold. As a result, carriage inwards is shown on the debit side of the trading account, which is used to calculate the gross profit earned by the business. Therefore, the correct answer is "debit side of the trading account".

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Question 38 Report

A trial balance is a proof of

arithmetical accuracy of postings only

accurate narration of the journa entries

accuracy of the debt entry

accuracy of the credit entry

accuracy of ledger entries

Answer Details

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Question 39 Report

The straight-line depreciation is

a fixed sum set aside for the replacement of the asset

a fixed percentage of the balance of the asset at the end of the year

an estimated amount each year

an inctease in the value of the asset

a fixed percentage of the cost of the asset written off each year

Answer Details

Straight-line depreciation is a method of calculating the decrease in the value of an asset over its useful life. This method assumes that the asset will lose its value evenly over its useful life. To calculate straight-line depreciation, you divide the cost of the asset by its useful life. The result is a fixed percentage of the cost of the asset that is written off each year. Therefore, the correct option is: "a fixed percentage of the cost of the asset written off each year."

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Question 40 Report

6,500

N5,500

N5,000

N4,000

N2,750

Answer Details

To calculate the amount charged in the profit and loss account, we need to start by calculating the cost of goods sold (COGS) for the year. COGS = Opening Stock + Purchases - Closing Stock We are given the opening stock as N6,500, and the closing stock as N5,500. We also know that N20,000 was paid for goods during the year. Therefore, the calculation for COGS is as follows: COGS = N6,500 + N20,000 - N5,500 = N21,000 Next, we need to calculate the gross profit. We are told that the gross profit is 25% on cost. Therefore, we can calculate the gross profit as follows: Gross Profit = COGS x Gross Profit Percentage Gross Profit = N21,000 x 25% = N5,250 Finally, we need to subtract the administrative and selling expenses from the gross profit to get the amount charged in the profit and loss account: Amount Charged in the Profit and Loss Account = Gross Profit - Administrative and Selling Expenses Amount Charged in the Profit and Loss Account = N5,250 - N2,750 = N2,500 Therefore, the correct answer is N2,500. "N2,750," is the amount of the administrative and selling expenses, but not the amount charged in the profit and loss account.

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Question 41 Report

What are the entries of posting credit purchases into the purchases ledger control account?

debt purchases ledger control accoun only

debit both purchases account and purchases ledger control account

credit purchases acount, debit purcases ledger control account

credit both purchases ledger control account and the purchases accunt

debit purchases account, credit purchases ladger control account

Answer Details

The entries for posting credit purchases into the purchases ledger control account are: - Debit the purchases account: This is because the purchases account represents the total amount of credit purchases made by the business during a given period. - Credit the purchases ledger control account: This account represents the total amount owed by the business to its suppliers for credit purchases made during the same period. By crediting this account, we are increasing the amount owed to suppliers, which is a liability for the business. When a credit purchase is made, the invoice received from the supplier is recorded in the purchases day book. The details from the purchases day book are then posted to the individual supplier's account in the purchases ledger. Once all the individual supplier accounts have been updated, the total amount of credit purchases for the period is calculated, and this total is then posted to the purchases account in the general ledger. Finally, the same total amount of credit purchases is also posted to the purchases ledger control account in the general ledger, but as a credit entry. This allows us to keep track of the total amount owed to suppliers at any given time. To summarize, when posting credit purchases into the purchases ledger control account, we debit the purchases account to record the total amount of credit purchases made by the business, and we credit the purchases ledger control account to keep track of the total amount owed to suppliers for credit purchases made during the same period.

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Question 42 Report

N21,610

N21,068

N20,668

N20,642

N34,742

Answer Details

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Question 43 Report

Which of the following belongs to the Nominal Ledger?

creditors account

debitors account

salaries account

fixtures account

stock account

Answer Details

The Nominal Ledger is a ledger account that records all the revenues, expenses, gains, and losses of a business, i.e., all the transactions that relate to the income statement. Out of the options provided, the "salaries account" belongs to the Nominal Ledger since it is an expense account used to record the salaries paid to employees. The "creditors account" and "debtors account" belong to the Personal Ledger, which is used to record the transactions related to individual persons or organizations. The "fixtures account" and "stock account" belong to the Real Ledger, which is used to record the transactions related to tangible assets such as property, plant, and equipment or inventory. Therefore, the correct answer is "salaries account".

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Question 44 Report

A balance of N102 on waged account was transferred as N120. This is error of

transposition

omission

principle

original entry

compensation

Answer Details

The error described is a transposition error. A transposition error occurs when the digits in a number are accidentally reversed or swapped, resulting in an incorrect value. In this case, the original balance of N102 was mistakenly recorded as N120, which means the digits were swapped. The correct balance should have been recorded as N201.

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Question 45 Report

Which of the following does not belong to the group?

straight line

insurance policy

diminishing balance

reducing balance

accumulated depreciation

Answer Details

The option that does not belong to the group is "insurance policy." The other options are all related to financial and accounting terms used to describe different methods of calculating the value of assets or liabilities. - Straight line is a method of depreciation where the same amount is deducted from the value of an asset every year over its useful life. - Diminishing balance and reducing balance are both methods of calculating the decreasing value of an asset over time, with diminishing balance using a fixed percentage rate and reducing balance using a fixed amount. - Accumulated depreciation is the total amount of depreciation that has been recorded for an asset since its acquisition. On the other hand, an insurance policy is a contract between an insurance company and an individual or organization that provides financial protection or reimbursement against losses. It is not directly related to the calculation of asset values or liabilities, making it the odd one out.

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Question 46 Report

Stock is N200 at start, and N320 at close purchases N2,055 and sales N3,189. Find the cost of goods sold

N3,186

N2,866

N2,255

N2,175

N1,935

Answer Details

To find the cost of goods sold, we need to subtract the value of the closing stock from the sum of the cost of goods purchased and the value of the opening stock. The cost of goods purchased is N2,055, and the opening stock is valued at N200, so the total value of goods available for sale is: N2,055 + N200 = N2,255 The value of the closing stock is N320, so the cost of goods sold can be calculated as: Cost of goods sold = N2,255 - N320 = N1,935 Therefore, the cost of goods sold is N1,935. In summary, to find the cost of goods sold, we need to subtract the value of the closing stock from the sum of the cost of goods purchased and the value of the opening stock. The cost of goods sold in this problem is N1,935.

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