2016 - WAEC Accounting Past Questions and Answers - page 3

In the income and expenditure account, Expenditure (payments) is recorded on the debit side and income (receipts) is recorded on the credit side. If the credit side exceeds the debit side, it is called a surplus. On the other hand, if the debit side exceeds the credit side, there is a deficit. From the options given, only ''donations'' is an income the rest are all expenses.

The Purchases of fixtures and fittings by a club is recorded in the receipt and payment account and balance sheet. Fixtures and fittings are assets recorded in the balance sheet and the balance sheet balances is used as the opening balance in the receipt and payment account.

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

 Each partner has a separate current account and includes;

• The credit side of the current account shows all the profits of the partners

• The credit side of the current account shows all the profits of the partner such as salary, interest on capital and the share of residue profits. 

80,000 + 20,000 = 100,000 

 

Prime costs consist of direct materials and direct labor. Direct materials include all tangible components of a product. For example, direct materials include raw materials, supplies, and any other component that becomes part of the finished product.

Inventory means those current assets, which have been or will be converted into the final products of a company for sale in the near future. In other words, inventory represents finished goods or goods in different stages of production that a company keeps at its premises or at third-party locations with ownership interest retained until goods are sold. The three most important types of inventory are the raw materials, the work in progress (semi finished goods / partly manufactured goods)  and the finished goods.