WAEC SSCE - Financial Accounting - 2008

Final accounts of a not-for-profit making organization is made up of

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Final accounts of a not-for-profit making organization are made up of income and expenditure account and balance sheet. The income and expenditure account is similar to the profit and loss account of a profit-making organization, and it shows the revenues and expenses of the organization for the period under consideration. The balance sheet, on the other hand, shows the assets, liabilities and the capital of the organization at the end of the period. The subscription accounts are part of the income and expenditure account, which shows the subscription income for the period. However, it is not the only component of the income and expenditure account, which also includes other revenue and expenses items. Receipts and payments account is a summary of cash and bank transactions, which are used to prepare the income and expenditure account and the balance sheet of the not-for-profit organization.

Henik Plc has departments A and B and has made the following information available concerning its operations;
\(\begin{array}{c|c} & \text{Departmental A} & \text{Departmental B} \\ \hline \text{Turn over} & ₦100,00 & ₦80,000\\ \text{Commission} & ₦3,600 & & \\ \text{Rent} & ₦6,000 & & \\ \text{Flor space}& & 200m^2 & 100m^2 \end{array}\)
Rent apportioned to Department B is

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Tale LTd. has 100,000 ordinary shares of ₦1 each and 60,000 5% preference shares of ₦1 each. Both were fully paid as shown below,
\(\begin{array}{c|c} & ₦\\ \text{Profit and loss appropriation b/f} & 10,000\\ \text{Net profit for the year} & 6,000\\ \text{Proposed dividend on ordinary shares} & 4,000\\ \text{Interim dividend} & 6,000\\ \text{Goodwill written off} \\ 600\end{array}\)
The dividend payable to preference shareholders is

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To calculate the dividend payable to preference shareholders, we need to first find the net profit available for appropriation. Net profit available for appropriation = Net profit for the year - Proposed dividend on ordinary shares - Interim dividend - Goodwill written off Net profit available for appropriation = ₦6,000 - ₦4,000 - ₦6,000 - ₦600 = (₦4,600) Since preference shares have a fixed dividend rate of 5%, we can calculate the dividend payable to preference shareholders as follows: Dividend payable to preference shareholders = 5% of (number of preference shares * par value per share) = 5% of (60,000 * ₦1) = ₦3,000 Therefore, the dividend payable to preference shareholders is ₦3,000. Option (c) ₦3,000 is the correct answer.

The entries to record goods bought for cash are: debit

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Which of the following is a storage device?

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A storage device is a hardware device that is used to store and retrieve digital information. Out of the given options, a diskette is a storage device. A diskette, also known as a floppy disk, is a thin, flexible magnetic disk that is used for data storage. It is inserted into a disk drive, which reads and writes data to the disk. Diskettes were commonly used in the past for storing small amounts of data, such as documents, pictures, and programs.

Which of the following concepts is exposed to hold when a proprietor makes a drawing of goods or cash from the business?

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The concept that is exposed to hold when a proprietor makes a drawing of goods or cash from the business is the "business entity" concept. The business entity concept states that the business is separate and distinct from its owner(s), and the owner's personal transactions or assets should not be mixed with the transactions or assets of the business. When the proprietor takes out goods or cash from the business for personal use, it is considered a withdrawal or a reduction of the owner's equity in the business and should be recorded accordingly. This ensures that the financial statements of the business reflect only the transactions and activities of the business and not those of the owner(s) personally.

Carriage inwards is posted to

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Trade creditors personal accounts are found in the

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Trade creditors personal accounts are found in the purchases ledger. The purchases ledger is a subsidiary ledger that contains the personal accounts of all the suppliers from whom the business buys goods or services on credit. Each supplier's account will record all the credit purchases made from them, the payments made to them, and any balance owing. Therefore, the trade creditors' personal accounts are maintained in the purchases ledger to track the company's credit purchases and outstanding payments to suppliers.

When provision is made for doubtful doubt, the accounting entries are

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When provision is made for doubtful debts, the accounting entries are: Debit: Profit and Loss Account Credit: Provision for Doubtful Debts Account This is because the provision for doubtful debts is a provision made by the business to cover the possibility of some of its debtors defaulting on their payments. The provision is an estimated amount of bad debts that the business expects to incur in the future. As such, it is charged as an expense to the profit and loss account, which reduces the profit for the year. On the other hand, the credit entry is made to the provision for doubtful debts account, which is a balance sheet account. This means that it represents a liability of the business, which will be set aside to cover the expected bad debts.

Which of the following is not a characteristic of a computer?

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Returns inwards is also called

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Returns inwards is also called "sales returns". This term refers to goods that have been sold to a customer but are returned to the seller due to defects, wrong delivery, or other reasons. The seller needs to record this transaction to adjust the sales revenue and inventory figures. The seller will credit the sales account and debit the returns inwards account. This transaction reduces the sales revenue and inventory balance.

Mark-up on goods sent to branch are recorded in the books by crediting

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Which of the following is not an instrument for controlling public expenditure?

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The instrument that is not for controlling public expenditure is a "memorandum". A constitution is a document that outlines the fundamental principles, rules, and regulations that govern a country, including its financial management. Financial regulations provide guidelines and procedures for the proper management of public funds. A budget is a financial plan that outlines expected revenue and expenses for a specific period and helps control government spending. However, a memorandum is a written message or communication used for various purposes, such as expressing thoughts, sharing information, or making requests, and is not an instrument used for controlling public expenditure.

Use the following information,
\(\begin{array}{c|c} & Le\\ \hline \text{Sales} & 183,400 \\ \text{Purchases} & 168000\\ \text{Opening stock} & 20,100\\ \text{Closing stock} & 48,800 \\ \text{Carriage outwards} & 2400\\ \text{Carriage inwards} & 5,000\\ \text{Returns inwards} & 10,000\\ \text{Expenses} & 15,000\\ \text{Returns outwards} & 8,000\end{array}\)
The gross profit is

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The class of shares to which payment of dividend depends on profit is

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The class of shares to which payment of dividend depends on profit is called "ordinary shares". These shares are also known as "common shares" and are the most commonly issued type of shares by companies. The holders of ordinary shares are entitled to vote on important matters relating to the company such as the appointment of directors and the approval of major decisions. The payment of dividends to ordinary shareholders is dependent on the profitability of the company. If the company makes a profit, the board of directors may declare a dividend to be paid to the ordinary shareholders. If the company does not make a profit, there may be no dividend declared for that period.

Which of the following is not a debit item in partners appropriation account?

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Tale LTd. has 100,000 ordinary shares of ₦1 each and 60,000 5% preference shares of ₦1 each. Both were fully paid as shown below,
\(\begin{array}{c|c} & ₦\\ \text{Profit and loss appropriation b/f} & 10,000\\ \text{Net profit for the year} & 6,000\\ \text{Proposed dividend on ordinary shares} & 4,000\\ \text{Interim dividend} & 6,000\\ \text{Goodwill written off} \\ 600\end{array}\)
The balance of the profit and loss appropriation account as at the end of the year was

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Which of the following terms is not used to describe the total amount stated in the memorandum of association approved by the registrar of companies?

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Use the following information
\(\begin{array}{c|c} & ₦ \\\hline \text{Opening capital} & 60,000 \\ \text{Drawings} & 4,000\\ \text{Cost of sales} & 50,000\\ \text{General expenses} & 7,000 \\ \text{Mark-up} & \text{50%} \end{array}\)
Net profit is

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In the preparation of manufacturing accounts, prime cost plus factory overheads equal to cost of

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In the preparation of manufacturing accounts, prime cost plus factory overheads equal to the cost of production. Prime cost includes the cost of raw materials and direct labor while factory overheads include all other indirect manufacturing costs such as rent, utilities, and factory supplies. When we add these two costs, we get the total cost of production. This total cost of production is an important figure in the calculation of cost of goods sold, which is used in determining the gross profit or loss of a manufacturing business.

Which of the following s not part of cost of production?

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Administrative overheads are not part of the cost of production. Direct material cost, direct wages, and factory overheads are the main components of the cost of production. Direct material cost refers to the cost of raw materials used in the production process. Direct wages refer to the wages paid to workers who are directly involved in the production process, such as machine operators and assembly line workers. Factory overheads include indirect costs such as rent, utilities, and depreciation of equipment used in the production process. On the other hand, administrative overheads are costs incurred in the general administration of the business, such as salaries of administrative staff, office rent, and office supplies. These costs are not directly related to the production process and are not included in the cost of production.

Which of the following is the basis accounting equation?

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Which of the following is the effect of an increase in the provision for discount allowed?

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An increase in the provision for discount allowed will result in a decrease in net profit. The provision for discount allowed is an estimate of the discounts that a business will give to its customers for early payment or other reasons. When the provision for discount allowed is increased, it means that the business is expecting to give more discounts than it previously estimated. This will reduce the amount of revenue the business will earn, and thus reduce the net profit. Therefore, the correct option is (3) decrease in net profit.

Which of the following is a debit entry in debtors control account?

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An analytical cash book is used to

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Use the following information,
\(\begin{array}{c|c} & Le\\ \hline \text{Sales} & 183,400 \\ \text{Purchases} & 168000\\ \text{Opening stock} & 20,100\\ \text{Closing stock} & 48,800 \\ \text{Carriage outwards} & 2400\\ \text{Carriage inwards} & 5,000\\ \text{Returns inwards} & 10,000\\ \text{Expenses} & 15,000\\ \text{Returns outwards} & 8,000\end{array}\)
The net profit is

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Tale LTd. has 100,000 ordinary shares of ₦1 each and 60,000 5% preference shares of ₦1 each. Both were fully paid as shown below,
\(\begin{array}{c|c} & ₦\\ \text{Profit and loss appropriation b/f} & 10,000\\ \text{Net profit for the year} & 6,000\\ \text{Proposed dividend on ordinary shares} & 4,000\\ \text{Interim dividend} & 6,000\\ \text{Goodwill written off} \\ 600\end{array}\)
The authorized capital of Tale Ltd is

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The authorized capital is the maximum amount of share capital that a company can issue to the public. The information provided in the question does not directly reveal the authorized capital of Tale Ltd, so we cannot determine the answer with certainty. We only know that the company has issued 100,000 ordinary shares of ₦1 each and 60,000 5% preference shares of ₦1 each, which were fully paid. However, we can calculate the total issued share capital by adding the values of the ordinary and preference shares, which gives a total of ₦160,000. Therefore, the closest answer to this question is ₦160,000.

Use the following to answer the given question
\(\begin{array}{c|c} & ₦\\ \hline \text{Opening debtors} & 40,000\\ \text{Opening creditors} & 30,000 \\ \text{Credit sales} & 100,000\\ \text{Credit purchases} & 80,000 \\ \text{Bad debts}& 5,500\\ \text{Set-offs} & 65,500\end{array}\)
Closing debtors figure is

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To find the closing debtors figure, we need to use the formula: Closing debtors = Opening debtors + Credit sales - Bad debts - Set-offs Plugging in the given values, we get: Closing debtors = 40,000 + 100,000 - 5,500 - 65,500 Closing debtors = 69,000 Therefore, the closing debtors figure is ₦69,000.

Which of the following is an advantage of the imprest system?

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Use the following information
\(\begin{array}{c|c} & ₦\\ \hline\text{Opening capital} & 60,000\\ \text{Drawings} & 4,000\\ \text{Cost of sales} & 50,000\\ \text{General expenses} & 7,000 \\ \text{Mark-up} & \text{50%} \end{array}\)
Closing capital is

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To calculate the closing capital, we need to start with the opening capital, and then add the profit and subtract any drawings. First, let's calculate the cost of goods sold (COGS): COGS = Cost of sales + (Mark-up x Cost of sales) COGS = 50,000 + (0.5 x 50,000) = 75,000 Next, let's calculate the gross profit: Gross profit = Sales - COGS Gross profit = (1 + Mark-up) x COGS - COGS Gross profit = Mark-up x COGS Gross profit = 0.5 x 50,000 = 25,000 Now we can calculate the net profit: Net profit = Gross profit - General expenses Net profit = 25,000 - 7,000 = 18,000 Finally, we can calculate the closing capital: Closing capital = Opening capital + Net profit - Drawings Closing capital = 60,000 + 18,000 - 4,000 = 74,000 Therefore, the answer is ₦74,000.

The practice of identifying with one constant approach where a number of approach exist for solving an accounting problem is the convention of

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The practice of identifying with one constant approach where a number of approach exist for solving an accounting problem is the convention of consistency. Consistency refers to the principle of selecting one method and using it consistently for similar accounting transactions over time. By following the consistency principle, a business can ensure that its financial statements are comparable across different periods and are not misleading to stakeholders. This helps in providing reliable and relevant financial information for decision-making.

A cash payment of ₦85 to Regina was entered in the books as ₦58. The entries to correct the error are: debit

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Which of the following is not a debit item in a partnership appropriation account?

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The purchase of furniture, an asset to the company was debited to purchases account. This is an error of

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Which of the following is not a subsidiary book?

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Repairs to air conditioners was debited to office equipment account. This is an error of

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A sales Day book is used for recording

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A sales day book is a document used by a business to record credit sales transactions made to customers. Credit sales are sales transactions where payment is not received immediately, but rather on a later date, as agreed between the seller and the buyer. The sales day book contains details such as the date of the sale, the name of the customer, the amount of the sale, and the account number of the customer. This information is used to keep track of the total amount of credit sales made during a particular period, and to generate invoices and statements to customers for payment at a later date. Therefore, the correct answer is credit sales.

In a partnership business, the net profit serves as opening figure for

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In a partnership business, the net profit serves as the opening figure for the appropriation account. The appropriation account is used to distribute the net profit among the partners according to their profit sharing ratio. It takes into account items such as interest on capital, salaries, and bonuses that are payable to the partners. The net profit figure is transferred from the profit and loss account to the appropriation account, which is then used to calculate the amount of profit that each partner is entitled to. Therefore, the answer is appropriation account.

Use the following to answer the given question
\(\begin{array}{c|c} & ₦\\ \hline \text{Opening debtors} & 40,000\\ \text{Opening creditors} & 30,000 \\ \text{Credit sales} & 100,000\\ \text{Credit purchases} & 80,000 \\ \text{Bad debts}& 5,500\\ \text{Set-offs} & 65,500\end{array}\)
Closing creditors figure is

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The closing creditors figure can be found using the following formula: Closing creditors = Opening creditors + Credit purchases - Set-offs Substituting the given values, we have: Closing creditors = 30,000 + 80,000 - 65,500 Closing creditors = ₦44,500 Therefore, the answer is ₦44,500.

Which of the following is a norminal account?

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The answer is sales account. A nominal account is an account that is related to revenues, expenses, gains or losses. The purpose of a nominal account is to track the income and expenses of a business, and to determine the net profit or loss for a specific period. Sales account is a nominal account as it records the revenue earned by a business from the sale of its goods or services. Bank account, cash account and stock account are real accounts which relate to tangible assets and liabilities of a business.

An approach for discovering missing figures in incomplete records is the use of

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The approach for discovering missing figures in incomplete records is the use of Control Accounts. A control account is a summary account that is used to verify the accuracy and completeness of entries made in a subsidiary ledger. It helps to detect and correct errors, as well as provide a quick overview of account balances. In the case of incomplete records, control accounts can be used to reconcile the missing figures by comparing the total balances of the subsidiary ledgers with the balances in the control accounts. This can help identify any discrepancies and allow for the missing figures to be determined and entered into the appropriate accounts.

Which of the following is not an item in the appropriation account of a company?

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Henik Plc has departments A and B and has made the following information available concerning its operations;
\(\begin{array}{c|c} & \text{Departmental A} & \text{Departmental B} \\ \hline \text{Turn over} & ₦100,00 & ₦80,000\\ \text{Commission} & ₦3,600 & & \\ \text{Rent} & ₦6,000 & & \\ \text{Flor space} & & 200m^2 & 100m^2 \end{array}\)
How much commission was apportioned to Department a?

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To determine the commission apportioned to Department A, we need to calculate the ratio of turnover between Department A and the total turnover of the company. Total Turnover = Turnover of Department A + Turnover of Department B Total Turnover = ₦100,000 + ₦80,000 = ₦180,000 Ratio of Turnover for Department A = Turnover of Department A / Total Turnover Ratio of Turnover for Department A = ₦100,000 / ₦180,000 = 5/9 Commission apportioned to Department A = Ratio of Turnover for Department A * Total Commission Commission apportioned to Department A = (5/9) * ₦3,600 = ₦2,000 Therefore, the commission apportioned to Department A is ₦2,000.

Use the following information,
\(\begin{array}{c|c} & Le\\ \hline \text{Sales} & 183,400 \\ \text{Purchases} & 168000\\ \text{Opening stock} & 20,100\\ \text{Closing stock} & 48,800 \\ \text{Carriage outwards} & 2400\\ \text{Carriage inwards} & 5,000\\ \text{Returns inwards} & 10,000\\ \text{Expenses} & 15,000\\ \text{Returns outwards} & 8,000\end{array}\)
The cost of goods sold is

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To calculate the cost of goods sold, we need to use the formula: Cost of Goods Sold = Opening Stock + Purchases + Carriage Inwards - Closing Stock - Returns Outwards Substituting the given values, we get: Cost of Goods Sold = 20,100 + 168,000 + 5,000 - 48,800 - 8,000 Cost of Goods Sold = Le 136,200 Therefore, the cost of goods sold is Le 136,200. The correct option is (c).

Payment for shares in installments is done by means of

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Payment for shares in installments is done by means of **calls**. Calls refer to the amount of money that shareholders are required to pay periodically to the company, in addition to the amount already paid for their shares. Calls are usually made in installments and are a way for the company to raise capital gradually. Once all calls are paid, the shareholder becomes a full owner of the shares. If a shareholder fails to pay a call, the company may take legal action or even forfeit their shares.

The difference between factory cost of goods produced and its market value is

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The difference between factory cost of goods produced and its market value is called manufacturing profit. This represents the amount of profit a manufacturing company makes from producing goods, taking into account the costs of raw materials, labor, and overhead expenses, and the selling price of the finished goods. The market value is the price at which the finished goods can be sold in the market. The factory cost of goods produced includes all the direct and indirect costs incurred in the production process, including direct materials, direct labor, and factory overheads. Therefore, the difference between the factory cost of goods produced and the market value represents the profit made by the manufacturer after accounting for all the production costs.

Use the following information,
\(\begin{array}{c|c} & D\\ \hline \text{Construction of classrooms} & 500,000\\ \text{Sinking of boreholes} & 100,000\\ \text{Staff salaries} & 150,000\\ \text{Electricity} & 14,000 \\ \text{Transport and travels} & 7000\\ \text{office expenses} & 9,000 \end{array}\)
Recurrent expenditure is

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Recurrent expenditure refers to the regular and ongoing expenses incurred by an organization or government entity to maintain its day-to-day operations. In the given information, the expenses of staff salaries, electricity, transport and travels, and office expenses are examples of recurrent expenditure because they are incurred regularly and are necessary for the day-to-day operations of the organization. The total amount of these expenses is: 150,000 + 14,000 + 7,000 + 9,000 = D180,000 Therefore, the answer is option A: D180,000.

A merchant paid ₦180,000 on rent for 18 months bu charged ₦120,000 to profit and loss account for the year. The concept applied is

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Use the following information,
\(\begin{array}{c|c} & D\\ \hline \text{Construction of classrooms} & 500,000\\ \text{Sinking of boreholes} & 100,000\\ \text{Staff salaries} & 150,000\\ \text{Electricity} & 14,000 \\ \text{Transport and travels} & 7000\\ \text{office expenses} & 9,000 \end{array}\)
Capital expenditure is

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In bank reconciliation, when a cash book shows a credit balance, uncredited cheques are i. deducted from the cash book balance. ii. added to the bank statement balance. iii. added to the cash book balance

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