2014 - WAEC Accounting Past Questions and Answers - page 3

Prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs.

Debit cash for the amount received, debit all accumulated depreciation, debit the loss on sale of asset account, and credit the fixed asset.

• The petty cash monthly imprest= 28,000
• Debit balance (amount left in the imprest) = 5,000
• 28,000 - 5,000 = 23,000
• we need 23,000 to reimburse the imprest

A deficit occurs for a nonprofit organization whenever its expenses exceed its revenue. (income is less than expenditure) . This is also true of businesses and government agencies. Deficits can be difficult for nonprofit organizations to overcome because they are heavily dependent upon the generosity of donors to stay afloat.

 Accrual concept is the most fundamental principle of accounting which requires recording revenues when they are earned and not when they are received in cash, and recording expenses when they are incurred and not when they are paid.

A company issues its shares at a premium when the price at which it sells the shares is higher than their par value. The amount of the premium is the difference between the par value and the selling price and will be debited to the share premium account.

Issue of Shares at Discount Definition: When a share is issued by the company at a price that is less than the face value of the share, the share is said to be issued at a discount.