waec model questions vol1 2017 financial_accounting | Essay

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Question 1 View Details
Answer the following questions on fundamental accounting concepts.
Question Parts
(a)
Define the entity concept and illustrate it with a short example relevant to a sole‑proprietor business.
(b)
Explain why the matching concept is important in accrual accounting and give one practical implication of ignoring it.
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Question 2 View Details
The following transactions were recorded for XYZ Traders for the month of January. Using the information provided, answer the questions below.
Question Parts
(a)
Record the journal entries for each of the transactions listed.
(b)
Post the journal entries to T‑accounts for Cash, Equipment, Inventory, Accounts Payable, Accounts Receivable, Capital, Sales Revenue, Cost of Goods Sold and Rent Expense.
(c)
Prepare a trial balance as at 31 January.
(d)
Using the trial balance, calculate:
() Gross profit
() Net profit
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Question 3 View Details
Micheal’s Trading Ltd carried out the following transactions during the month of March: 1. 1 March – Purchased inventory on credit for ₦120,000. 2. 5 March – Made cash sales amounting to ₦85,000. 3. 10 March – Paid rent of ₦20,000 in cash. 4. 12 March – Returned defective goods to the supplier worth ₦15,000. 5. 15 March – The owner injected cash of ₦30,000 into the business. Using the above information, answer the questions that follow.
Question Parts
(a)
Record each of the above transactions in the General Journal. Show the date, account titles, debit and credit amounts, and a brief narration for each entry.
(b)
Explain the accounting principle that requires the purchase return to be recorded as a debit to Accounts Payable and a credit to Purchases Returns.
(c)
Calculate the total of the Debit column and the total of the Credit column of the journal you prepared in part (a). State whether the journal is balanced.
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Question 4 View Details
The following trial balance was prepared for Greenfield Enterprises at the end of the fiscal year. All figures are in Naira. | Account | Debit (₦) | Credit (₦) | |-----------------------|-----------|------------| | Cash | 70,000 | | | Purchases | 120,000 | | | Rent Expense | 30,000 | | | Advertising Expense | 30,000 | | | Sales Revenue | | 180,000 | | Owner’s Capital | | 50,000 | | Accounts Payable | | 10,000 | | **Totals** | 250,000 | 240,000 | Using the above trial balance, answer the questions that follow.
Question Parts
(a)
Post the balances to the respective ledger accounts and prepare T‑accounts for Cash, Purchases, Sales Revenue and Rent Expense. Show the closing balance of each of these four accounts.
(b)
From the ledger information, prepare a Statement of Profit or Loss for the period. State the Gross Profit and the Net Profit (or Net Loss).
(c)
The total of debit balances in the trial balance is ₦250,000 while the total of credit balances is ₦240,000. Discuss possible reasons for this discrepancy and suggest practical steps the accountant should take to locate and correct the error.
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Question 5 View Details
The following ledger account balances were extracted at the end of the accounting period. All amounts are in Naira. - Cash: Dr 45,000 - Accounts Receivable: Dr 30,500 - Inventory: Dr 22,000 - Equipment: Dr 80,000 - Accumulated Depreciation – Equipment: Cr 20,000 - Accounts Payable: Cr 18,500 - Salaries Payable: Cr 12,000 - Capital: Cr 100,000 - Drawings: Dr 15,000 - Sales Revenue: Cr 150,000 - Cost of Goods Sold: Dr 90,000 - Salaries Expense: Dr 25,000 - Rent Expense: Dr 10,000 - Utilities Expense: Dr 5,500 - Interest Expense: Dr 2,500 Using the above information, answer the following questions:
Question Parts
(a)
Prepare a trial balance showing separate debit and credit columns.
(b)
State whether the trial balance balances. If it does not, calculate the difference.
(c)
Assuming the trial balance is out of balance by the amount found in (b), identify two possible types of errors that could cause this discrepancy.
(d)
Suggest one specific adjusting entry that could be made to correct a common error identified in (c).
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Question 6 View Details
A sole trader maintains a single‑column cash book for cash transactions. The following transactions occurred during the month of March. | Date | Description | Cash Receipts (N) | Cash Payments (N) | |------|---------------------------------|-------------------|-------------------| | 3/02 | Cash sales to customers | 48,000 | | | 3/05 | Paid rent for March | | 10,000 | | 3/07 | Received cash from a client (outstanding account) | 12,500 | | | 3/10 | Purchased inventory for cash | | 22,000 | | 3/12 | Paid salaries | | 15,000 | | 3/15 | Received cheque from a customer (N15,000) – deposited in bank but not yet cleared | | | | 3/18 | Paid utilities | | 3,500 | | 3/22 | Owner withdrew cash for personal use (drawings) | | 5,000 | | 3/27 | Cash sales to customers | 30,000 | | | 3/30 | Paid advertising | | 4,000 | The opening cash balance on 1 March was N5,000. Answer the following:
Question Parts
(a)
Record the above transactions in the cash book and compute the closing cash balance on 31 March.
(b)
During the month a cheque for N15,000 was deposited but not yet cleared by the bank. Show how this amount would be reflected in a bank reconciliation statement.
(c)
If the cash book shows a closing balance of N8,500 but the physical cash on hand is N7,900, explain two possible reasons for the discrepancy and recommend one control measure to prevent it.
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Question 7 View Details
Alpha Manufacturing Ltd prepared its cash book for the month ended 30 June 2024. The following information is available:
Question Parts
(a)
Calculate the adjusted cash book balance after recording the bank service charge, interest earned and the bank error.
(b)
Identify two possible reasons for the difference between the cash book balance and the bank statement balance before any adjustments are made.
(c)
Prepare a bank reconciliation statement that reconciles the cash book balance to the bank statement balance, showing all necessary adjustments.
(d)
Explain the impact on the firm's financial statements if bank reconciliations are not performed regularly.
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Question 8 View Details
Delta Traders Ltd maintains subsidiary ledgers for its sales and purchases. The following transactions occurred during July 2024. The opening balances are a debit ₦10,000 in the Sales Ledger Control Account and a credit ₦5,000 in the Purchases Ledger Control Account.
Question Parts
(a)
Prepare the Sales Ledger Control Account for July 2024, showing the opening balance, all transactions and the closing balance. State whether the closing balance is a debit or credit balance.
(b)
Compute the closing balance of the Purchases Ledger Control Account for July 2024 and indicate its nature (debit or credit).
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