WAEC SSCE - Financial Accounting - 1998 (Objective)

Question 1 Report

Which of the following is n asset?

bad debt provision

rent in arrears

sales

accrued wages

insurance prepaid

Answer Details

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Question 2 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Furniture and Fittings} & 15,000 \\ \text{Land and building} & 40,000 \\ \text{Motor Vehicles} & 25,000 \\ Stock & 10,000 \\ Debtors & 27,000 \\ \text{Cash in hand} & 2,000 \\ \text{Bank overdraft} & 17,500 \\ \text{Profit and loss b/d} & 28,000 \\ \text{Rent owing} & 800 \\ \text{Sundry creditors} & 22,000\end{array}\)
The value of current liabilities is

N56,5000

N40,300

N39,500

N28,000

N22,000

Answer Details

To calculate the value of current liabilities, we need to identify the liabilities that are expected to be paid within the next 12 months. These include the bank overdraft, rent owing, and sundry creditors. Bank overdraft: N17,500 Rent owing: N800 Sundry creditors: N22,000 Adding these amounts together, we get: N17,500 + N800 + N22,000 = N40,300 Therefore, the value of current liabilities is N40,300. The label for this answer would be: current liabilities, value, calculation.

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Question 3 Report

Carriage inwards are included on goods

on display

sold

in process

purchases

on return

Answer Details

Carriage inwards refers to the cost of transporting goods from the supplier to the buyer. These costs are incurred by the buyer and are therefore included in the cost of the goods purchased. This means that carriage inwards is included on goods that are purchased, which makes the correct answer "purchases".

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Question 4 Report

Which of the following cannot be realized?

debtors

creditors

fixtures

goodwill

motor vehicles

Answer Details

In accounting, the term "realized" means that an asset has been converted into cash or another asset that can be readily converted into cash. Therefore, an asset that cannot be readily converted into cash or another asset that can be readily converted into cash is considered unrealizable. Out of the given options, "goodwill" cannot be realized because it represents the intangible value of a business, such as its reputation or customer base, and cannot be sold or easily converted into cash.

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Question 5 Report

The accountant general disburses government fund by the use of

a voucher

a warrant

an estimate

a vote

aa provision

Answer Details

The accountant general disburses government funds by the use of a warrant. A warrant is a written authorization that permits the holder to receive payment of a specified amount of money. In the context of government funds, a warrant is issued by the accountant general to authorize the payment of money from the government's consolidated fund to a specific person or entity. The warrant specifies the amount to be paid, the payee's name, and the purpose of the payment. The warrant serves as evidence of the government's obligation to make the payment and helps to ensure accountability in the disbursement of public funds.

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Question 6 Report

Carriage outwards is the amount spent on transporting

goods sold

goods purchased

goods returned to stock

excess stock

goods for manufacture

Answer Details

Carriage outwards is the cost incurred by a business to transport goods sold from the business premises to the customer. It is a type of selling expense and is recorded in the income statement as a deduction from sales revenue. In other words, carriage outwards refers to the cost of delivering goods to customers and is thus associated with goods sold.

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Question 7 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Opening stock of Raw Materials} & 5,800 \\ \text{Closing stock of Raw Materials} & 4,500 \\ \text{Raw material purchased} & 19,000\\ \text{Carriage outwards} & 1,300 \\ \text{Direct labour} & 4,000 \\ \text{Electricity(Factory)} & 2,500 \\ \text{Supervisor's salary} & 5,500 \\ \text{Depreciation of Plant} & 1,500 \\ Sales & 58,000 \\ \text{Closing stock(Finished Goods)} & 4,500 \\ \text{Administrative expenses} & 5,500 \\ \text{selling and Distribution Expenses} & 3,000\end{array}\)
The cost of raw materials used is

N28,100

N24,300

N29,300

N21,600

N20,300

Answer Details

To calculate the cost of raw materials used, we need to find out the raw material consumed during the year. Raw material consumed = Opening stock of raw materials + Purchases - Closing stock of raw materials Using the information given in the table: Raw material consumed = 5,800 + 19,000 - 4,500 = 20,300 Therefore, the cost of raw materials used is N20,300. Answer: N20,300.

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Question 8 Report

N26,800

N25,600

N24,300

N21,300

N20,300

Answer Details

The prime cost is the total cost of direct materials and direct labor used in producing a product. To calculate the prime cost, we need to add the cost of the raw materials used in production, the direct labor costs and any other direct costs associated with production. From the information given, the opening stock of raw materials is N5,800, the closing stock of raw materials is N4,500, and raw material purchased is N19,000. To calculate the cost of raw materials used in production, we subtract the closing stock of raw materials from the sum of the opening stock of raw materials and raw material purchased. Cost of raw materials used = (Opening stock of raw materials + Raw material purchased) - Closing stock of raw materials = (N5,800 + N19,000) - N4,500 = N20,300 The direct labor cost is N4,000. Therefore, the prime cost is the sum of cost of raw materials used and direct labor cost. Prime cost = Cost of raw materials used + Direct labor cost = N20,300 + N4,000 = N24,300 Hence, the prime cost is N24,300.

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Question 9 Report

Accounts payable is

an accrual

a provisin

a current liability

a long-term liability

a current asset

Answer Details

Accounts payable is a current liability, which represents the amount of money that a company owes to its suppliers or vendors for goods or services that have been purchased but not yet paid for. When a company purchases goods or services on credit, it creates an accounts payable balance. This balance is usually settled within a short period, such as 30 days or 60 days, depending on the agreed-upon terms with the supplier. Accounts payable is an important part of a company's working capital management, as it reflects the amount of cash that a company needs to pay to its suppliers in the near future.

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Question 10 Report

N52,2000

N51,200

N48,300

N39,500

N28,000

Answer Details

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Question 11 Report

Use the following information to answer the given questions
\(\begin{array}{c|c} & N \\ \hline Debtors & 30,000 \\ Creditor & 20,000 \\ \text{Opening stock} & 15,000 \\ \text{Closing stock} & 18,000\\ Wages & 3,000 \\ Salaries & 10,000 \\ Purchases & 30,000 \\ Sales & 60,000\end{array}\)
The working capital is

48,000

N33,000

N28,000

N25,000

N10,000

Answer Details

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Question 12 Report

4.0 times

3.6 times

3.3 times

2.0 times

1.8 times

Answer Details

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Stock Valuation

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Question 13 Report

100%

67%

50%

33%

17%

Answer Details

To calculate the net profit percentage, we need to subtract all the expenses from the total revenue and then divide it by the total revenue. Total Revenue = Sales = N60,000 Total Expenses = Opening Stock + Purchases + Wages + Salaries - Closing Stock = N15,000 + N30,000 + N3,000 + N10,000 - N18,000 = N40,000 Net Profit = Total Revenue - Total Expenses = N60,000 - N40,000 = N20,000 Net Profit Percentage = (Net Profit / Total Revenue) x 100% = (N20,000 / N60,000) x 100% = 33.33% (rounded to the nearest whole number) Therefore, the answer is 33%.

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Question 14 Report

To realize an asset means to

close its account in the ledger

give it out as a collateral

turn it to cash

open its account in the ledger

mortage it

Answer Details

To realize an asset means to turn it into cash or cash equivalent, such as selling the asset or exchanging it for cash. This can be done in order to use the cash for other purposes, to invest in a different asset, or to pay off liabilities. When an asset is realized, it is typically recorded in the accounting records to reflect the change in the company's financial position.

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Question 15 Report

Goods worth N800 was stolen. The double entries are, debit,

purchases account, credut trading account

trading account, credit purchases account

profit and loss account, credit purchases account

drawings account, credit purchases account

capital account, credit purchasses account

Answer Details

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Question 16 Report

Which of the following is true in Public sector accounting? Cost of assets is

depreciated on straight line method

depreciated on reducing balance method

expensed in the year of purchase

charged to federation account

not recognized in any form

Answer Details

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Question 17 Report

Which of the following is an example of production overhead?

discount allowed

carried inwards

factory rent

carriage outwards

depreciation of office equipment

Answer Details

Production overhead refers to the indirect costs associated with the production process, such as rent, utilities, and maintenance expenses for the factory. Therefore, the example of production overhead from the given options is "factory rent", as it is a cost that is necessary for the production process but is not directly related to the cost of materials or labor used in producing a specific product.

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Question 18 Report

The accounting year of Fehintola Ltd. ends on 31st December every year. Pant and Machinery purchased on 1st January, Year 1 N600,000
Depreciation rate per anuum, 10%
Scrap value, N60,000.
Using reducing balance method, what is the net book value on 31st December of Yr. 2?

N551,400

N546,00

N540,000

N486,000

N440,000

Answer Details

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Question 19 Report

67%

55%

50%

45%

33%

Answer Details

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Question 20 Report

Uche returned goods worth N1,500 to Udo. Uche should receive

an invoice

a statement of account

a debit note

a credit note

goods received note

Answer Details

Uche returned goods worth N1,500 to Udo. In this situation, Udo owes Uche the value of the goods returned. Therefore, Udo should issue a credit note to Uche to indicate that Udo's account with Uche has been credited with N1,500. A credit note is a document used to record the return of goods or the reduction of an invoice amount. It is an acknowledgement that a customer's account has been credited with a specific amount, usually due to an overpayment, return of goods or discount. So, the answer is a credit note.

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Question 21 Report

Which of the following has a debit balance? i. calls-in-arrears ii. cash-in-advance iii. share discount

iii

ii and iii

Answer Details

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Question 22 Report

Payment for shares in excess of amount demanded gives rise to

dividend warrant

revenue reserve

capital reserve

call-in-advance

call-in-arrears

Answer Details

Payment for shares in excess of the amount demanded gives rise to "call-in-advance". When a company issues shares, it may demand a certain amount from shareholders as payment. However, in some cases, shareholders may voluntarily pay more than the demanded amount. The excess payment is called a "call-in-advance". It represents money paid by the shareholders in advance to the company for the shares they have bought. This excess payment can be refunded to the shareholders if the company decides to repay it, or it can be used by the company for its business operations. It is different from "call-in-arrears", which occurs when shareholders fail to pay the demanded amount for the shares they have bought.

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Question 23 Report

The loss made by a non-trading organization is called

surplus

drawing

deficit

shortage

discount

Answer Details

The loss made by a non-trading organization is called a deficit. A non-trading organization is an organization that does not engage in buying and selling activities to make a profit, such as a charity or a government agency. If the expenses of the organization exceed its income, it will incur a deficit. This means that it has a negative balance in its accounts and owes more than it owns. The deficit can be financed by drawing on reserves, borrowing or fundraising.

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Question 24 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & N \\ \hline \text{Construction of classrooms} & 500,000\\ \text{Purchase of tablets and chairs} & 50,000 \\ \text{Purchase of textbooks for library} & 40,000 \\ \text{Annual inter-house sports competition} & 20,000 \\ \text{Payment of teachers salary} & 80,000
\end{array}\)
Recurrent expenditure of the year was

N170,000

N130,000

N120,000

N100,000

N80,000

Answer Details

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Question 25 Report

Interest on Partner's drawing is credited to

capital account

drawings account

current account

profit and loss account

appropriate account

Answer Details

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Question 26 Report

\(\begin{array}{c|c} & N \\ \hline \text{Opening stock of Raw Materials} & 5,800 \\ \text{Closing stock of Raw Materials} & 4,500 \\ \text{Raw material purchased} & 19,000\\ \text{Carriage outwards} & 1,300 \\ \text{Direct labour} & 4,000 \\ \text{Electricity(Factory)} & 2,500 \\ \text{Supervisor's salary} & 5,500 \\ \text{Depreciation of Plant} & 1,500 \\ Sales & 58,000 \\ \text{Closing stock(Finished Goods)} & 4,500 \\ \text{Administrative expenses} & 5,500 \\ \text{selling and Distribution Expenses} & 3,000\end{array}\)
he gross profit

N33,800

N28,700

N28,300

N18,900

Answer Details

To calculate the gross profit, we need to subtract the cost of goods sold (COGS) from the sales revenue. The COGS is the sum of the opening stock of raw materials, raw materials purchased, and any direct expenses incurred in manufacturing the finished goods, minus the closing stock of finished goods. COGS = Opening stock of Raw Materials + Raw material purchased - Closing stock of Raw Materials + Direct Labour + Electricity(Factory) + Supervisor's salary + Depreciation of Plant COGS = 5,800 + 19,000 - 4,500 + 4,000 + 2,500 + 5,500 + 1,500 COGS = N28,800 Now, we can calculate the gross profit by subtracting the COGS from the sales revenue. Gross Profit = Sales - COGS Gross Profit = N58,000 - N28,800 Gross Profit = N29,200 Therefore, the gross profit is N29,200. Option B (N28,700) is close to the actual answer but it's not the exact value, so the correct answer is option A (N33,800) which is not close to the actual answer. It's important to note that the gross profit varies depending on the business, its operations, and its expenses.

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Question 27 Report

Which of the following is the personal ledger?

assets account

discount allowed account

sales account

discount received account

debtors account

Answer Details

The personal ledger is the Debtors Account. A debtor is a person or an organization that owes money to another person or organization. The debtors account is a record of all the people or organizations that owe money to the business. It is a type of personal ledger because it deals with accounts that represent people or entities with whom the business has a personal relationship. The other options listed are not personal ledgers, as they do not deal with accounts representing people or organizations, but rather accounts representing assets, expenses, and revenues.

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Question 28 Report

Discount allowed is charged to

profit and loss appropriation account

manufacturing account

trading account

profit and loss account

current account

Answer Details

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Question 29 Report

N10,800

N9,800

N9,500

N8,500

N5,300

Answer Details

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Question 30 Report

The accounting year of Fehintola Ltd. ends on 31st December every year. Pant and Machinery purchased on 1st January, Year 1 N600,000
Depreciation rate per anuum, 10%
Scrap value, N60,000. Using the straight line method, what is the cumulative depreciation at the end of yr.3?

N216,000

N206340

N180,000

N162,600

N162,000

Answer Details

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Question 31 Report

When a share is sold for less than its nominal value, the difference is debited to

share premium account

share discount account

profit and loss account

capital reserve account

general reserve account

Answer Details

When a share is sold for less than its nominal value, the difference is debited to the share discount account. A company may offer shares at a discounted price to attract investors or to raise capital quickly. When this happens, the difference between the nominal value of the share and the discounted price is called the discount. This discount is debited to the share discount account, which is a contra-equity account. The share discount account reduces the total value of the company's equity. It is important to note that the share discount account is different from the share premium account, which is used to record the excess price paid for shares sold above their nominal value.

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Question 32 Report

Which of the following is/are true? i. depreciation charges increase profits ii. reduction in provision for bad debt increases profit iii. undervalued stock increases profits

ii and iii

i and iii

iii

Answer Details

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Question 33 Report

Which of the following is a recurrent expenditure to a Local Government Council?

building classroom

sinking of wells

purchase of drugs

construction of markets

purchase of hospital beds

Answer Details

The recurrent expenditures of a Local Government Council are the regular or routine expenses that it incurs to keep its operations running. Out of the options given, "purchase of drugs" is the only one that fits the definition of a recurrent expenditure. This is because a Local Government Council would need to regularly purchase drugs to supply its health facilities and clinics, which is an essential service it provides to the community. The other options, such as building classrooms, sinking wells, constructing markets, and purchasing hospital beds, are capital expenditures, which are one-time expenses incurred to acquire or improve assets.

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Question 34 Report

Opening stock + Purchases + carriage inwards is equal to

total sales

cost of goods sold

cost of goods available for sale

gross profit

prime cost

Answer Details

The sum of opening stock, purchases, and carriage inwards represents the total cost of goods available for sale during a given period of time, which means all the costs incurred in getting the goods ready for sale. Therefore, the correct answer is "cost of goods available for sale."

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Question 35 Report

N119,500

N90,000

N80,000

N79,200

N68,300

Answer Details

The total fixed assets of a business are the long-term assets that a business has, which are not meant for sale within the year. The fixed assets on the balance sheet include furniture and fittings, land and building, and motor vehicles. Therefore, the value of total fixed assets can be calculated by adding the value of furniture and fittings, land and building, and motor vehicles, which is 15,000 + 40,000 + 25,000 = N80,000. Therefore, the correct answer is option (iii) N80,000.

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Question 36 Report

N690,000

N590,000

N500,000

N140,000

Answer Details

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Provisions And Reserves

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Question 37 Report

When a fixed asset is fully depreciated, its net book value is

equal to its original cost

twice its original cost

equal to its current market value

the difference between its cost and market value

equal to zero

Answer Details

When a fixed asset is fully depreciated, its net book value is equal to zero. Depreciation is the process of allocating the cost of a fixed asset over its useful life, and at the end of its useful life, the asset is said to be fully depreciated. At this point, the accumulated depreciation will be equal to the original cost of the asset. Therefore, the net book value of the asset, which is the cost of the asset minus its accumulated depreciation, will be zero. In other words, when an asset has been fully depreciated, it means that its cost has been fully spread over its useful life, and there is no value left to be carried on the books. The asset may still have some value in the market, but on the books, its net book value will be zero.

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Question 38 Report

Provision for discount on debtor on debtors is to be

debited to profit and loss account

creit to profit and loss discount

debit to debtors account

debited to provision for bad debts account

Answer Details

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Question 39 Report

A balance sheet is prepared

for the year ended...........19 x 1

for............19 x 1

as to.............19 x 1

in the year..............19 x 1

up to...........19 x 1

Answer Details

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Principles Of Double Entry

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Question 40 Report

Which of the following is the least liquid?

stock

debtors

bills receivable

payment machinery

Answer Details

The least liquid asset is the one that cannot be easily converted into cash. In this case, payment machinery would be the least liquid as it cannot be easily sold or converted into cash. Stocks, debtors, and bills receivable can be easily converted into cash as they are assets that are readily tradable in the market.

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Question 41 Report

N160,000

N114,000

N60,000

N54,000

N48,000

Answer Details

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Question 42 Report

Rent paid during 1995 was N2,000 while rent paid at 31st December, 1995 was

N2,400

N2,200

N2,000

N1,800

N200

Answer Details

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Question 43 Report

N68,300

N57,000

N40,300

N39,500

N34,000

Answer Details

To calculate the value of current assets, we need to add up the value of all assets that can be easily converted to cash within one year. From the given information, the current assets are: - Stock: N10,000 - Debtors: N27,000 - Cash in hand: N2,000 Total current assets = N10,000 + N27,000 + N2,000 = N39,000 Therefore, the value of current assets is N39,000. The closest option to this answer is option D: N39,500.

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Question 44 Report

Which of the following is not a Nominal Account?

electricity account

furnitures and fittings account

postages and telephone account

insurance account

discount allowed account

Answer Details

A Nominal Account is a type of account that records expenses, losses, gains, or incomes. Out of the options given, the account that is not a nominal account is the "Furnitures and fittings account." This is because it records the purchase of furniture and fittings which are assets of the business and not expenses, losses, gains or incomes.

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Question 45 Report

N33,800

N33,200

N28,700

N28,300

N18,900

Answer Details

To find the production cost, we need to add the cost of raw materials used, direct labor cost, and factory overheads (electricity and depreciation of plant). The cost of raw materials used can be calculated as follows: Raw materials used = Opening stock of raw materials + Purchases - Closing stock of raw materials = 5,800 + 19,000 - 4,500 = 20,300 The factory overheads can be calculated as: Factory overheads = Electricity + Supervisor's salary + Depreciation of plant = 2,500 + 5,500 + 1,500 = 9,500 Therefore, the production cost can be calculated as: Production cost = Raw materials used + Direct labor cost + Factory overheads = 20,300 + 4,000 + 9,500 = N33,800 Hence, the answer is N33,800.

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Question 46 Report

The accounting year of Fehintola Ltd. ends on 31st December every year. Pant and Machinery purchased on 1st January, Year 1 N600,000
Depreciation rate per anuum, 10%
Scrap value, N60,000. Using the straight line method, what is he net book value at the beginning of the year 3?

N540,000

N492,00

N438,000

N437,400

Answer Details

The net book value of an asset is the value of the asset as recorded in the accounting records, less the accumulated depreciation. To calculate the accumulated depreciation using the straight-line method, you subtract the scrap value from the cost of the asset and divide the result by the useful life of the asset in years. The depreciation expense for each year is the same amount, calculated as the cost of the asset minus the scrap value, divided by the useful life in years. For this question, the cost of the plant and machinery is N600,000, the scrap value is N60,000, and the useful life is 10 years. Therefore, the annual depreciation expense is (N600,000 - N60,000) / 10 = N54,000. At the beginning of year 3, the asset will have been depreciated for 2 years. The accumulated depreciation is therefore 2 * N54,000 = N108,000. The net book value is the cost of the asset minus the accumulated depreciation, which is N600,000 - N108,000 = N492,000. Therefore, the answer is N492,000.

Read lesson note on Nature And Significance Of Accounting (JAMB)

Nature And Significance Of Accounting

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Question 47 Report

Partners salary is shown in the

trading account

profit and loss account

income and expenditure

profit and loss appropriation account

partner's capital account

Answer Details

Partner's salary is shown in the profit and loss appropriation account. This account is used to distribute the net profit of a partnership among the partners according to the terms of their partnership agreement. The profit and loss appropriation account contains various items, such as partner's salaries, interest on capital, and profit shares allocated to each partner. Partner's salaries are usually fixed amounts that are paid to partners for their services to the partnership, and they are deducted from the net profit of the partnership before the remaining profits are allocated among the partners.

Read lesson note on Partnership Accounts (WAEC)

Read lesson note on Nature And Significance Of Accounting (JAMB)

Partnership Accounts

Nature And Significance Of Accounting

View Answer

Question 48 Report

Which of the following is a source of the local government Revenue?

personal income tax

sales of armed forces property

repayment (state)

repayment (Interest and General)

market rates