2012 - WAEC Accounting Past Questions & Answers - page 1

1

The objectively of accounting information is enable users to

A
prepre the financial statements
B
value stock
C
make decisions
D
prepare budgets
CORRECT OPTION: c

To make sound financial decisions. 

2

Trade discounts are given for

A
bulk purchases
B
prompt payment
C
quick delivery
D
cash payment
CORRECT OPTION: b

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.

3

When closing stock is overstated, it would reduce,

A
cost of sales and increase gross profit
B
gross profit and increase cost of sales
C
purchases and increases sales
D
sales and increase purchases
CORRECT OPTION: b

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

4

Which of the following is not a source document?

A
journal paper
B
sales invoice
C
debit note
D
credit note
CORRECT OPTION: a

The types of sources documents are:

  • Purchase order.
  • Cash receipt.
  • Invoice.
  • Cash register.
  • Tapes.
  • Credit.
  • Debit note.
  • Deposit slips
5

A fixed assets fully written-down by a trader is now considered to be worth ₦5,000. The double entry required to reflect this is debit

A
asset account credit purchase account
B
asset account credit capital account
C
capital account credit asset account
D
capital account credit profit and loss account
CORRECT OPTION: b

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

6

Which of the following is a book of ordinary entry?

A
ledger
B
balance sheet
C
bank statement
D
sales journal
CORRECT OPTION: d

 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.
7

A balance sheet shows only

A
fixed assets and current assets
B
assets and long term liabilities
C
assets and liabilities
D
assets and capital
CORRECT OPTION: c

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

8

The process of entering transaction from one book to another is

A
reading
B
posting
C
numbering
D
listing
CORRECT OPTION: b

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

9

Which of the following is a trading account item?

A
discount allowed
B
discount recieved
C
carriage outwards
D
carriage inwards
CORRECT OPTION: d

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

10

The addition of prime cost and factory overhead is

A
total factory overheads
B
market value of goods produced
C
cost of goods produced
D
work-in-progress
CORRECT OPTION: c

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.

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