2014 - WAEC Accounting Past Questions and Answers - page 2

An error of principle is an accounting mistake in which an entry is recorded in the incorrect account, violating the fundamental principles of accounting. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly.

The general ledger should include the date, description and balance or total amount for each account. It is usually divided into at least seven main categories. These categories generally include assets, liabilities, owner's equity, revenue, expenses, gains and losses.

Since the shop is involved in the sales of electronics and fans are electronics, the purchase is therefore considered stock which has been purchased by Akpan electronic enterprise for resale. 

Examples of nominal accounts include purchase account, sales account, salary A/C, commission A/C etc. The nominal account is income statement account(expenses, income, loss, profit) and is also known as temporary account unlike balance sheet account ( Asset, Liability, owner's equity) which are permanent account.

Net profit is the actual profit after working expenses not included in the calculation of gross profit have been paid.

Administrative expenses are the expenses that an organization incurs not directly tied to a specific function such as manufacturing, production or sales. stationaries aren't administrative expense.

Receipts and payments account are used by non profit making organization, It is a summarized form of Cash Book. All receipts are recorded on its left-hand (Debit) side and all payments are recorded on its right-hand (credit) side. receipts & payments accounts show only the cash and bank transactions in that accounting period. it doesnt include stock paid for in advance

The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses.