2016 - WAEC Accounting Past Questions and Answers - page 1

External users are people outside the business entity (organization) who use accounting information. Examples of external users are suppliers, banks, customers, investors, potential investors, and tax authorities.

Tangible assets are physical in nature that can be either long-term or short-termassets. Intangible assets are long-term assets that are not physical, but rather, intellectual property. Both tangible and intangible assets are recorded on the balance sheet.

impersonal account; any account other than a personal account, being classified as either a real account, in which property is recorded, or a nominal account, in which income, expenses and capital are recorded.

To answer this question, note that whatever comes into the business is recorded on the debit side, and whatever goes out is recorded on the credit side. 

''Nwoye buys stock and pays by cheque''. The entries in the books of Nwoye is, debit Purchases and Credit bank. what this accounting entry means is that, money had gone out of the business by virtue of the cheque that was issued to a seller by nwoye for the purchase of stocks (goods) for resale and in return, goods were given to Nwoye (goods have come into the business after payment was made by cheque). Always remember the principle of double entry which states that, for every credit entry, they must be a corresponding debit entry vice versa. 

NOTE: in accounting, purchases are goods that are bought for the purpose of reselling.

error of commission; a mistake that consists of doing something wrong, such as including a wrong amount, or including an amount in the wrong place. Example; If we debit or credit an account, other than the correct account, but with the correct amount, the total debits and credits in the ledger will remain equal and hence the trial balance will not disclose the error.

An overdraft is a deficit in a bank account caused by drawing more money than the account holds.

The bank will deduct the deficit balance from the new deposit as thus; GH¢ 400,000 - GH¢ 190,000 = GH¢ 210,000

An imprest is a fund used by a business for small items of expenditure and restored to a fixed amount periodically.

A reimbursement is a repayment for money you've already spent.

• The petty cashier imprest is a fixed amount of GH¢6,000
• At the end of the month GH¢2,000 left
• The imprest will be reimbursted with GH¢4,000

Error of Complete Reversal Entry – As the name implies, this means that the debit and credit entry recorded for a particular transaction are reversed. The transactions are incorrect but because the amount is the same or equal at both sides, the trial balance still balanced.

A bank reconciliation is used to compare your records to those of your bank, to see if there are any differences between these two sets of records for your cash transactions. The ending balance of your version of the cash records is known as the book balance, while the bank's version is called the bank balance.