WAEC SSCE - Financial Accounting - 2022 (Essay)

Maelezo ya Majibu

a i. Accumulated fund holds excess money received by a non-profit organization. It is similar to the retained earnings of a profit firm, the accumulated fund grows when revenues are greater than expenses and there is budgetary surplus.

a ii. Statement of affairs is a document typically prepared by ab accountant, which details a company's assets and liabilities. It is designed to provide an overview of the company's financial position.

b. - Donations
- Subscriptions/Dues
- Fines
- Profits from bar
- Entrance fees

c. - Receipt and payment account is a summary of cash and bank transactions while Income and expenditure account is a summary of current year income and expenses.

- Receipt and payment account records transactions related to both revenue and capital nature while Income and expenditure account records transactions related to revenue nature only.

-Receipt and payment account is a real account while Income and expenditure account is a nominal account.

Maelezo ya Majibu

a. Three accounts prepared by the head office for the branch are:

• Branch Stock Account
• Branch Debtors Account
• Branch Expenses Account

b. Two methods of accounting for goods sent to branch are:

• Consignment method: Under this method, the goods are sent to the branch at the invoice price. The branch then sells the goods to customers and sends the proceeds to the head office. The head office then charges the branch with the cost of goods sold and any other expenses incurred by the branch.
• Cost price method: Under this method, the goods are sent to the branch at cost price. The branch then sells the goods to customers and sends the proceeds to the head office. The head office then charges the branch with the cost of goods sold and any other expenses incurred by the branch.

c. Four reasons for preparing departmental accounts are:

• To determine the profitability of each department: By preparing departmental accounts, the management can determine the profitability of each department. This helps in identifying the departments that are performing well and those that are not.
• To facilitate decision making: Departmental accounts provide detailed information about the performance of each department. This information can be used by the management to make decisions about resource allocation, expansion, downsizing, etc.
• To motivate departmental managers: Departmental accounts provide departmental managers with information about the performance of their departments. This information can be used to motivate the managers to improve the performance of their departments.
• To control costs: Departmental accounts provide information about the costs incurred by each department. This information can be used by the management to control costs and improve efficiency.

Maelezo ya Majibu

a. Dr SUBSCRIPTION ACCOUNT Cr

b. Dr COMPETITION PRIZE SUPPLIERS ACCOUNT Cr

c. 

COMPETITION TRADING ACCOUNT

d. 

INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER 2019
 

Maelezo ya Majibu

a. Goodwill refers to the intangible value of a business that arises from factors such as reputation, customer loyalty, brand recognition, and favorable relationships with suppliers or employees. It represents the positive reputation and market standing that a business has built over time, which can lead to increased customer trust, competitive advantage, and higher profits. Goodwill is typically recorded when a business is purchased for a price higher than the value of its tangible assets.

b. Four items of recurrent expenditure for a local government may include:

• Salaries and wages: Regular payments made to employees for their services.
• Utilities: Expenses related to electricity, water, gas, and other public services used by the local government.
• Maintenance and repairs: Costs incurred for the upkeep and repair of infrastructure, buildings, and equipment.
• Administrative expenses: Expenditure on office supplies, communication services, insurance, legal fees, and other administrative costs necessary for the functioning of the local government.

c. The three types of inventory in a manufacturing account are:

• Raw materials: These are the materials and components that are purchased and used in the production process but have not yet been transformed or incorporated into the final product.
• Work-in-progress (WIP): WIP inventory includes partially completed products that are still undergoing the manufacturing process. It represents the value of materials, labor, and overhead costs invested in the products that are in various stages of completion.
• Finished goods: Finished goods inventory consists of the completed products that are ready for sale and have undergone all the necessary manufacturing processes. They are the final products that are held by the manufacturer until they are sold to customers.

Each type of inventory represents a different stage of the production process. Raw materials are the starting point, WIP represents products in progress, and finished goods are the final output. The value of these inventories is important for determining the cost of goods sold, assessing the manufacturing efficiency, and managing the inventory levels to meet customer demand.

Maelezo ya Majibu

a. The three books of account from which entries are made into control accounts are:

• Sales Ledger (for sales made on credit)
• Purchases Ledger (for purchases made on credit)
• Returns Inwards/Outwards Journal (for goods returned by customers/suppliers)

b. Two uses of control accounts are:

• To check the accuracy of entries made in the subsidiary books of account (Sales/Purchases Ledgers) by comparing them to the balances in the control accounts.
• To provide a summary of transactions relating to debtors and creditors, which can be used to prepare the financial statements.

c. i. Four items recorded on the debit side of Purchases Ledger Control Account are:

• Purchases Returns (goods returned to suppliers)
• Purchase Allowances (allowances granted by suppliers)
• Carriage Inwards (costs incurred to transport goods to the business)
• Customs Duty (duty paid to government for imported goods)

c. ii. Four items recorded on the debit side of Sales Ledger Control Account are:

• Sales Returns (goods returned by customers)
• Sales Allowances (allowances granted to customers)
• Trade Discounts (discounts granted to customers)
• Bad Debts Written Off (debts that are unlikely to be collected and written off as expenses)

Maelezo ya Majibu

a. Ade & Co
Dr Koli Account Cr

Dr Erica Account Cr

Dr Mary Account Cr

Dr kristy Account Cr

b. 

Dr TOTAL CREDITORS CONTROL ACCOUNT Cr

Maelezo ya Majibu

DUPE ENTERPRISES
Dr Adjusted Cashbook Cr

b. 

BANK RECONCILIATION STATEMENT AS AT 31ST DECEMBER 2016

Maelezo ya Majibu

a. TRADING ,PROFIT OR LOSS AND APPROPRIATION ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2018

b. 

BALANCE SHEET AS AT THAT DATE

Maelezo ya Majibu

a. STATEMENT OF CAPITAL EXPENDITURE

b. 

STATEMENT OF REVENUE EXPENDITURE