2012 - WAEC Accounting Past Questions and Answers - page 1

To make sound financial decisions. 

A trade discount represents the reduction in cost of goods or services sold in the business environment. Trade discounts can help small businesses save money when purchasing goods or services from suppliers. Many suppliers require small businesses to pay within a specific time frame to receive the trade discount.

One of the main reasons why firms offer trade discounts is to encourage debtors to clear their outstanding balances quickly.

when closing stock is overstated, the cost of goods available for sale will be high and the gross profit low. The higher the cost of sales, the lower the gross profit

The types of sources documents are:

• Purchase order.
• Cash receipt.
• Invoice.
• Cash register.
• Tapes.
• Credit.
• Debit note.
• Deposit slips

Debit asset account with 5000 and credit  capital account with 5000. 

 Books of original entry refers to the accounting journals in which business transactions are initially recorded. The information in these books is then summarized and posted into a general ledger, from which financial statements are produced.

The main books of prime entry are:

• Sales day book.
• Purchase day book.
• Sales returns day book.
• Purchases returns day book.
• Bank Book.
• Cash Receipts Book.
• Cash Payments Book.
• Petty Cash Receipts Book.

A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity.

Posting in accounting is when the balances in sub-ledgers and the general journal are shifted into the general ledger. 

Carriage inwards is the shipping and handling costs incurred by a company that is receiving goods from suppliers. It is added to the cost of purchase and recorded in the trading account

The cost of goods manufactured equation is calculated by adding the total manufacturing costs; including all direct materials, direct labor (prime cost) and factory overhead; to the beginning work in process inventory and subtracting the ending goods in process inventory.