2015 - WAEC Accounting Past Questions & Answers - page 1

1

Which of the following describes a trial balance?

A
It is a special account
B
It is a list of balances in the books
C
It reveals the financial position of a business
D
It shows all the entries in the books of a business
CORRECT OPTION: b

trial balance is a bookkeeping or accounting report that lists the balances in each of an organization's general ledger accounts.

2

Which of the following is not a feature of accounting information?

A
Affordability
B
Timeliness
C
Accuracy
D
Completeness
CORRECT OPTION: a
  • Relevance: information makes a difference in decision making
  • Reliability: information is verifiable, factual, and neutral
  • Comparability: information can be used to compare different entities
  • Consistency: information is consistently presented from year to year
3

Which of the following is the equation for determining net profit or loss from the records of a firm?

A
Closing Capital - Drawings - Capital Introduced
B
Opening Capital + Drawings - Closing Capital
C
Closing Capital + Opening Capital - Drawings
D
Closing Capital + Drawings - Opening Capital
CORRECT OPTION: c

Your net income or net loss equals your total revenues minus your total expenses for an accounting period. If your revenues are greater than expenses, you have net income. If revenues are less than expenses, you have a net loss. example

Net profit or loss = Revenue - total expenses

4

Purchase invoice is first entered in the

A
Purchases Account
B
Cash Book
C
Sales Journal
D
Purchases Journal
CORRECT OPTION: a

Purchases account. The purchases account is a general ledger account in which is recorded the inventory purchases of a business. This account is used to calculate the amount of inventory available for sale in a periodic inventory system.

Purchase journal is used for recording goods bought on credit

5

Assets acquired is recorded by debiting _______?

A
Asset Account, Crediting Cash Account
B
Cash Account, Crediting Asset Account
C
Purchase of Business Account, Crediting Sale of Business Account
D
Asset Account, Crediting Purchase of Business Account
CORRECT OPTION: a

Debit the appropriate asset account in a journal entry in your records by the cost of the asset. Credit the cash account in the same journal entry by the amount of cash you used toward the purchase. If you paid all cash, this amount is the same as the asset's cost.

6

Goods returned to a supplier is

A
Debited to returns outward account
B
Credited to returns outwards account
C
Debited to returns inwards account
D
Credited to returns inwards account
CORRECT OPTION: b

When merchandise purchased for cash are returned to supplier, we need to record two journal entries. In first entry we debit accounts receivable account and credit purchases returns and allowances account (returns outwards would ve credited because goods are going out of the business). This entry is made to recognize the return of merchandise.

7

Which of the following is not a real account?

A
Plant account
B
Salaries account
C
Creditors account
D
Trading account
CORRECT OPTION: b

Examples of real accounts are:

  • Cash.
  • Accounts receivable.
  • Fixed assets.
  • Accounts payable.
  • Retained earnings.
8

The accounting ledger for goods sold on credit are debit

A
debtors account, credit sales account
B
creditors account, credit sales account
C
sales account, credit debtors account
D
sales account, credit creditors account
CORRECT OPTION: a

Accounting and journal entry for credit sales include 2 accounts, debtor and sales. In case of a journal entry for cash sales, cash account and sales account are used. The person who owes the money is called a “debtor” and the amount owed is a current asset for the company. Since the goods were sold on credit, debtor acount will be debited (increase in the amount of money being owed to the business), and sales account will be credited.

9

Which of the following is not a book of original entry?

A
Sales journal
B
Purchases account
C
Cash account
D
Return inwards journal
CORRECT OPTION: b

Books of original entry refers to the accounting journals in which business transactions are initially recorded. They include;

  1. Sales journal
  2. purchase day book
  3. returns inwards
  4. returns outwards
  5. cash book
  6. general ledger
10

What is a ledger entry for the sale of plant and machinery on credit to Wilson?

A
Credit sales account and debit cash account
B
Credit plant and machinery account and debit Wilson's account
C
Credit sales account and debit Wilson's Account
D
Credit plant and machinery account and debit cash account
CORRECT OPTION: c

The sales and receipts classes of transactions are the typical journal entries, that debit accounts receivable (debtors) and credit sales revenue, and debit cash and credit accounts receivable  in which the amount owed will be paid at a later date. 

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