2005 - WAEC Accounting Past Questions and Answers - page 4
31
"Transactions are governed by legal principles, but are nevertheless accounted for and presented in accordance with the substance and financial reality". This is in compliance with the principle of
A
substance over form
B
prudence
C
objectively
D
materiality
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32
Which of the following statements is no correct?
A
profits increase capital
B
losses reduce capital
C
drawings reduce capital
D
drawings increase capital
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33
Direct material + direct expenses is
A
overhead
B
prime cost
C
total cost
D
conversion cost
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34
Books of account are opening by means of a
A
purchases journal
B
principal journal
C
sales journal
D
returns inward journal
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35
When both debit and credit entries of a transaction are shown in the cash book, it is described as
A
contra entry
B
reversal entry
C
double entry
D
single entry
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36
The correct order of liquidity is
A
stock, debtors, prepayments and cash
B
cash, payments, debtors and stock
C
stock, cash, debtors and preyaments
D
debtors, stock, cash and prepayments
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37
Which of the following ratios measure the ability of a firm to meet short-term obligations?
A
net profit margin
B
quick asset ratio
C
turnover
D
creditors ratio
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38
Which of the following is a capital reserve?
A
profit and loss account balance
B
share premium
C
gross profit
D
share discount
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39
When shares are sold at less than the nominal value, it means they are issued at
A
a premium
B
a loss
C
a discount
D
par
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40
Where goods are invoiced by a firm its branch at cost-plus, the branch stock adjustment accounts is used to determine
A
cost price
B
branch profit
C
selling price
D
branch expenses
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