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Closing entries: are entries made at the end of an accounting period to zero out all temporary accounts and transfer their balances to permanent accounts. In other words, the temporary accounts are closed or reset at the end of the year.
(i) Branch is a subdivision of a company and is a geographical classification. While a department is a classification based on the function, activites or goods.
(ii) The branch is an extension of the office with more or less the same features. While a department is a technical area of a office which is under the same premises
(i)Depreciation of Fixed Assets: To ensure that the opening balance of the fixed assets and closing balance of the fixed assets (of course deducting depreciation) are shown in the Branch Account.
(ii)Goods in Transit: To ensure that the difference between goods sent by Head Office and received by the Branch. Such goods will be shown either on both sides of the Branch Account or will be ignored altogether while preparing the Branch Account.
(iii)Expenses Incurred by Branch: To ensure that the the amount remitted by Head Office to Branch for meeting expenses is debited in Branch Account. If actual amount spent by Branch is less, the cash balance is shown as a part of closing balance, in the credit side of the Branch Account.
(iv)Loss of Stock, Surplus of Stock: To ensure that the Shortage or surpluses of stock at the Branch due to normal or abnormal reasons are not shown in the Branch Account.
(i) Insufficient fund
(ii) Wrong signature
(iii) If the cheque is post dated
(i)Petty cash float: This is small amount of cash kept at hand for making immediate payments for miscellaneous small expenses.
(ii)Contra entries: This is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, it will be recorded on the credit side and vice-versa.
(iii)Imprest system: This is a form of financial accounting system. The most common imprest system is the petty cash system. In other words it is a fixed amount that is reserved, which after a certain period of time or when circumstances require, because money was spent, it will be replenished.
(i)Reduction in numbers of transactions: Many expenses of small nature recorded in petty cash book, the number of transactions is reduced in the cash.
(ii)Reduction of errors: As head cashier check the accounts of previous month and gives advance for the coming month, does, errors if any are reduced.
(iii)Savings of time and labour: As the petty expenses are recorded by petty cashier at any time so that the chances of misuse are minimised.
4/3|PAPUK:80bags of maize@255, less Trade doc. 5/100*20400|SJ|20400, 1020|19380
10/3|ABASS:Transfer to sales account| |1170|1170=20550
4/3 sales: 19380
SALES LEDGER CONTROL A?C
In the books of Ubochi and Hassanah
Profit and Loss appropriation account for the year ended 31/12/2015
Int. on Capital:
Share of profit:
Int. on drawing
Patner’s current account
DEBIT SIDE: U|H
Int on Drawing|10000|750
CREDIT SIDE: U|H
Int. on cap|24000|20000
Share of profit:|148600|99100
Stock turnover Ratio = COGS/Avg stock
= 160,000/(3,0000 + 4,0000)/2)
= 200000 x 2/10000 = 11.43 times
(9b) Gross Profit Margin = Gross Profit/Sales x 100/1
= 160,000/360,000 x 100/1 = 44.44%
(9c) Net Profit Margin = Net Profit/Sales x 100/1
= 40,000/360,000 x 100/1 = 11.11%
(9d) Current Ratio = current Assets/Current Liabilities
Current Assets = 90,000/45,000 = 2:1
(9e) Acid Test Ratio = Current Assets – Stock / Current Liabilities
= 90,000 – 40,000/45,000
= 50,000/45,000 = 10:9
Past WAEC Financial Accounting Theory and Obj Answers
A source document is the original record containing the details to substantiate a transaction entered in an accounting system
– credit note
-petty cash voucher
Accumulated fund:This is the funds that correspond to the capital of the partnership or sole trader and it will be calculated using the statement of affairs
Subscription in arrears:This is the sum of money due for members but remained unpaid.It is treated as debtors in the balance sheet
Reciepts and payments:this is the accounts that shows the summary of a cash book over a particular period of time
Income and expenditure account:This is type of account being prepared based on the same principle as the profit and loss accounts.It is described as the equivalent of profit and loss account
Entrance fees:This is the money paithe d on the application for membership of an association or club.It is normally treated as income in income and expenditure account
A share is defined as that portion of the joint stock companies capital owned by a shareholder while debentures are documents in form of borrowing (eg bond issued under the seathe l of the company in respect of money lent to it) on which the company agree to pay a certain fixed rate of interest
MANUFACTURING TRADING PROFIT AND LOSS A/C FOR THE YEAR END 31/12/2014
Add carriage inwards:7500
Add direct expenses:11400
Less closing stock:40000
Add WIP @start:60000
Less WIP @ end:64000
less Gross profit on manufactured goods:22840
Add Market value:251240
Less stock F.G:72000
G.P on manufactured:22840
TABULATE IN 3 COLUMNS
Cash Salako bomissionssion of entries of the book|1000|1000
Suspense sales being undercast |560|560
Pet out suspense being amount overcast|140|140
Discreceivedeived suspense being amomittedtted in the Damilola’s a/c|410|410
Return out Drawings being amount undercast|180|180
Suspense discount allowed being discount overcast|310|310
Discreceivedeived suspense being amount overcast|400|400
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