2017 WAEC GCE Accounting Answers
ACCOUNT OBJ ANSWERS
(i)trade discount An amount or rate by which the catalog,
list, or retail price of an item is reduced when sold to a
(ii)cash discount is a deduction allowed
by the seller of goods or by the provider of services in
order to motivate the customer to pay within a specified
(iii)bad debtis a monetary amountowed to a creditor that
is unlikely to be paid and, or which the creditor is not
willing to take action to collectbecause of various
reasons, often due to the debtor not having the money
(iv)provision for doubtful debts is the estimated amount
of bad debt that will arise from accounts receivable that
have been issued but not yet collected.
(v)bad debt recovery is business debt from a loan, credit
line or accounts receivablethat is recovered either in
whole or in part after it has been written off or classified
as a bad debt.
(i)Error of commission
(ii)Error of principle
(iii)Error of compensation
(iv)Error of original entry
(v)Error of transition
A suspense account is an account used on a temporary basis for any transaction or balance that cannot be identified.
A provision is the amount of an expense or reduction in the value of an asset that an entity elects to recognize now in its accounting system, before it has precise information about the exact amount of the expense or asset reduction while Reserve is an appropriation of profits for a specific purpose. The most common reserve is a capital reserve, where funds are set aside to purchase fixed assets. By setting aside a reserve, the board of directors is segregating funds from the general operating usage of a company.
Expense is the term for a cost incurred in the process of producing or offering a primary business operation while revenue is the term used to describe income earned through the provision of a business’ primary goods or services.
Capital reserve denotes funds set aside out of profits generated from exceptional transactions not occuring inordinary course of business.e.g sale of Assets (being a going concern), Profits arising in Forfeiture of Shares due to non payment of calls in arrear etc.They are not available for distribution to share holders in normal circumstances.
Revenue reserve denotes profits set aside from transactions involving ordinary & usual business activities.e.g sale of goods & services, investment profits if it is in ordinary course of business etc.They are available for distribution to share holders in normal circumstances.
MANUFACTURING TRADING PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2015
DEBIT SIDE: N
Opening stock of raw materials:6372
Purchases stock of raw materials:47522
Closing stock of raw materials (8958)
Cost of raw materials used 44934
Manufacturing wages 64926
Prime cost 109862
Salaries and wages (2/3 * 45740) 30493
Rent and wages (2/3 *6244) 4163
Expenses and maintenance 3634
Dep: Plant and machinery 4900
Work in progress(opening) 5490
Work in progress (closing)(7242)
Opening stock of finished goods:8528
Cost of production: 157304
Closing stock of finished goods:(19302)
Cost of goods sold 146530
Gross profit c/d 144860
CREDIT SIDE: N
Cost of production of goods completed c/d:157304
SALES LEDGER CONTROL ACCOUNT
Cash refunded to customers:150
Interest charge on account:50
PURCHASES LEDGER CONTROL ACCOUNT
Agege local government
Statement of capital expenditure for the year ended 31st
Extention of classroom =N400,000
construction of bridges =N635,000
purchase of drugs =N135,000
provision of street light =N74,500
renovation of office building =N106,500
31st Dec bal C|d =N1,351,000
statement of recurrent expeniture for the year ended
training and development =65,330
maintenance of motor vehicle =55,800
administrative expenses =100,870
salaries of traditional chief =105,000
disposal of refuse =203,440
postages and salaries =123,450
personel cost =877,540
31st dec bal c|d =N1,577,330
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