Practice waec model questions vol1 financial_accounting 2021 Past Questions

Question 1 View Details

The cash book for the month of March shows an opening cash balance of ₦20,000. The total of all receipts recorded is ₦150,000 and the total of all payments recorded is ₦120,000, giving a closing balance of ₦50,000. Later it is discovered that a payment of ₦8,000 was mistakenly entered on the receipts side instead of the payments side. What is the corrected closing cash balance after rectifying this error?

Correct A. 34000

B. 42000

C. 26000

D. 58000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 2 View Details

A government department follows modified accrual accounting. Its budget for the year estimates cash receipts of ₦200,000,000 and cash payments of ₦190,000,000. During the year the department actually received cash of ₦180,000,000, made cash payments of ₦170,000,000, accrued revenue of ₦15,000,000 and accrued expenses of ₦20,000,000. (Assume the opening cash balance was zero.) Calculate (a) the department's net financial position at year‑end, and (b) the budgetary surplus or deficit. Briefly explain why the two figures differ.

Correct A. Net financial position = ₦5,000,000 surplus; Budgetary surplus = ₦10,000,000

B. Net financial position = ₦5,000,000 surplus; Budgetary surplus = ₦8,000,000

C. Net financial position = ₦10,000,000 surplus; Budgetary surplus = ₦10,000,000

D. Net financial position = ₦5,000,000 deficit; Budgetary surplus = ₦10,000,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 3 View Details

On 15 June, XYZ Ltd purchased a delivery van for cash costing ₦50,000. State the effect of this transaction on the accounting equation (Assets = Liabilities + Equity), indicating the change in each component.

A. Assets: increase ₦50,000 (equipment +₦50,000); Liabilities: no change; Equity: no change

Correct B. Assets: no net change (equipment +₦50,000, cash -₦50,000); Liabilities: no change; Equity: no change

C. Assets: decrease ₦50,000 (cash -₦50,000); Liabilities: no change; Equity: no change

D. Assets: no net change (equipment +₦50,000, cash -₦50,000); Liabilities: increase ₦50,000; Equity: no change

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 4 View Details

The following information relates to ABC Traders for the year ended 31 December. - Opening inventory: ₦30,000 - Purchases: ₦120,000 - Purchase returns: ₦5,000 - Freight‑in: ₦3,000 - Closing inventory: ₦28,000 - Sales: ₦200,000 - Sales returns: ₦12,000 - Trade discount on sales: 5 % (calculated on the gross sales amount) Using the above data, compute the gross profit for the year.

A. 54000

B. 62000

C. 50000

Correct D. 58000

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 5 View Details

The cash book's bank column shows a closing balance of ₦25,000. The bank statement for the same date shows a balance of ₦18,000. The following items have not yet been recorded in the cash book: bank charges of ₦500 and interest earned of ₦200. Deposits in transit amount to ₦4,000 and outstanding checks total ₦3,500. After adjusting the cash book for the unrecorded bank charges and interest, what is the corrected cash book balance in the bank column?

A. 24200

B. 25000

Correct C. 24700

D. 25200

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 6 View Details

The journal for the month records five transactions. The debit amounts are ₦45,000, ₦12,500, an unknown amount X, ₦8,000 and ₦15,000. The credit amounts are ₦30,000, an unknown amount Y, ₦20,000, ₦10,000 and ₦20,500. The cash book shows total cash receipts of ₦55,000, which equal the sum of the cash‑related debit entries in the journal. It is known that the first and fourth debit entries are cash receipts. Also, the total of all debit entries must equal the total of all credit entries. Determine the unknown debit amount X.

Correct A. 2000

B. 3000

C. 2500

D. 1500

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 7 View Details

A company records depreciation expense for a piece of equipment before the equipment has been purchased. Which fundamental accounting concept is being violated?

Correct A. Matching concept

B. Consistency concept

C. Historical cost principle

D. Revenue recognition principle

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 8 View Details

A manufacturing firm uses weighted‑average process costing. Opening work‑in‑process (WIP) consists of 5,000 units that are 40 % complete for materials and 30 % complete for conversion. During the period 20,000 units are started. At the end of the period 18,000 units are completed and transferred out and 7,000 units remain in ending WIP, which are 60 % complete for materials and 50 % complete for conversion. Costs are as follows: Opening WIP - Materials ₦120,000, Conversion ₦80,000; Costs added during the period - Materials ₦540,000, Conversion ₦460,000. Calculate the total cost of the ending WIP inventory (round to the nearest naira).

A. 211500

B. 213000

Correct C. 212772

D. 210000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 9 View Details

The cash book of a company shows a debit balance of ₦85,000. The bank statement balance is ₦87,500. The following items are identified: - Outstanding checks: ₦12,000 (three checks). - Deposits in transit: ₦6,500. - Bank service fee of ₦800 not yet recorded in the cash book. - A customer's cheque of ₦2,200 was returned dishonoured; it had been recorded as received in the cash book. Prepare the bank reconciliation and state the corrected cash‑book balance after making the necessary entries.

A. 80000

Correct B. 82000

C. 81500

D. 83000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 10 View Details

The Machinery ledger shows an opening debit balance of ₦150,000. During the period the following entries were posted to the Machinery account: 1. Purchase of new machinery on credit: ₦45,000. 2. Sale of old machinery for cash: credit ₦20,000. 3. Depreciation expense charged: credit ₦12,000. 4. Correction of a mistaken debit of ₦5,000 (the amount was intended for Office Equipment): credit ₦5,000. Determine the closing balance of the Machinery ledger and state whether it is a debit or credit balance.

A. 158000 credit

B. 147000 debit

Correct C. 158000 debit

D. 163000 debit

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 11 View Details

The following trial balance was prepared for XYZ Ltd. (all figures in ₦): Cash Dr 180,000 Accounts Receivable Dr 70,000 Equipment Dr 250,000 Supplies Dr 40,000 Prepaid Rent Dr 20,000 Expenses Dr 90,000 Accounts Payable Cr 150,000 Capital Cr 250,000 Revenue Cr 240,000 It is later discovered that (i) a purchase of equipment on credit for ₦4,000 was recorded only on the debit side, and (ii) a cash receipt of ₦6,000 was recorded twice on the debit side. After correcting these errors, what should be the total of the debit side of the trial balance?

Correct A. 644000

B. 650000

C. 646000

D. 638000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 12 View Details

A machine was purchased on 1 January 2021 for ₦500,000. Its estimated residual value is ₦50,000 and its useful life is 5 years. The company depreciates the asset using the double‑declining‑balance method for the first two years and then switches to the straight‑line method for the remaining years. What is the book value of the machine at the end of year 3?

A. 154000

Correct B. 136667

C. 108000

D. 230000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 13 View Details

The Trade Receivables Control Account for ABC Traders shows: Opening balance Dr ₦120,000 Credit sales ₦80,000 Cash receipts ₦50,000 Closing balance shown Dr ₦150,000 At the end of the period the subsidiary ledger of customers totals ₦140,000. Assuming the control account is correct, determine the amount of error in the subsidiary ledger and state the most likely nature of the error.

A. 20000

B. 15000

Correct C. 10000

D. 5000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 14 View Details

A manufacturing machine costs ₦800,000. Its estimated residual value is ₦80,000 and it is expected to produce 200,000 units over its useful life. Using the units‑of‑production method, calculate the depreciation expense for the third year if the machine produced 60,000 units in that year. (Assume the production in the first two years was 45,000 and 55,000 units respectively.)

A. 200000

Correct B. 216000

C. 240000

D. 180000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 15 View Details

A merchandising business has the following incomplete records for the year ended 31 December 2021 (all amounts in ₦): Sales 1,200,000 Opening inventory 150,000 Purchases 900,000 Operating expenses (excluding COGS) 180,000 Net profit 120,000 The gross profit ratio is 30 % of sales. Using the gross‑profit method, determine the value of the closing inventory and the amount of any unrecorded loss that must be recognised.

A. 240000

B. 195000

Correct C. 210000

D. 180000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 16 View Details

A business has total assets of ₦150,000 and owner's equity of ₦45,000. What is the amount of its liabilities?

A. 115000

B. 150000

Correct C. 105000

D. 95000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 17 View Details

A machine was purchased for ₦120,000. Its estimated residual value is ₦20,000 and its useful life is 5 years. Using the straight‑line method, what is the annual depreciation expense?

A. 30000

B. 10000

Correct C. 20000

D. 24000

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 18 View Details

The cash book for the month shows an opening cash balance of ₦15,000. The following cash receipts were recorded: cash sales ₦28,400; loan received ₦12,500; interest received ₦800; and a cash discount received on a purchase of ₦1,500 at 5%. Cash payments were: rent ₦9,600; utilities ₦2,350; cash purchase of inventory ₦14,750; and owner's withdrawal ₦3,200. Determine the closing cash balance at the end of the month.

Correct A. 26875

B. 26800

C. 30075

D. 28300

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 19 View Details

A trading business reported sales of ₦250,000 for the year. The gross profit ratio is 25% of sales. Opening stock was ₦45,000 and closing stock ₦55,000. Operating expenses (salaries and rent) total ₦42,000. Purchases were recorded net of a 2% trade discount and after purchase returns of ₦4,500. Determine the gross (pre‑discount) amount of purchases for the year.

A. 201530.61

B. 206030.61

Correct C. 206122.45

D. 202000.00

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 20 View Details

The owner invested ₦80,000 cash and equipment valued at ₦120,000 into the business. Record the journal entry for this transaction using the double‑entry system.

A. Debit Cash 80,000; Debit Equipment 120,000; Credit Owner's Capital 180,000

B. Debit Cash 100,000; Debit Equipment 120,000; Credit Owner's Capital 220,000

C. Debit Cash 80,000; Credit Equipment 120,000; Credit Owner's Capital 200,000

Correct D. Debit Cash 80,000; Debit Equipment 120,000; Credit Owner's Capital 200,000

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 21 View Details

A municipality had an operating fund appropriation of ₦120,000,000 with 8% unspent at year‑end and a capital fund appropriation of ₦80,000,000 with 4% unspent. The operating fund was allowed to receive a ₦5,000,000 transfer from the capital fund because its unspent amount exceeded 5%. After the transfer, the operating fund's expenditures are the appropriation (including the transfer) less its unspent amount, and the capital fund's expenditures are its appropriation less its unspent amount. Statutory law requires that total expenditures for the year must not exceed 95% of the total appropriations after the transfer. Determine whether the municipality complied with the statutory limit and state the amount of excess or shortfall (in naira).

Correct A. Complied; total expenditures were ₦187,200,000, which is ₦2,800,000 below the 95% limit.

B. Not complied; total expenditures were ₦191,200,000, which is ₦1,200,000 above the 95% limit.

C. Complied; total expenditures were ₦188,500,000, which is ₦1,500,000 below the 95% limit.

D. Not complied; total expenditures were ₦186,000,000, which is ₦4,000,000 below the 95% limit.

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 22 View Details

A machine was purchased for ₦500,000 on 1 March. It was originally estimated to have a useful life of 5 years and a salvage value of ₦50,000, and depreciation is charged on a straight‑line basis. After two full years, management revises the remaining useful life to a total of 4 years (i.e., 2 years remaining) and reduces the salvage value to ₦30,000. Assuming the first year's depreciation is prorated for the 10 months from March to December, calculate the depreciation expense to be recorded for the third year (the year ending 31 December of the third year).

A. ₦90,000

Correct B. ₦152,500

C. ₦150,000

D. ₦155,000

Correct Answer: B

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 23 View Details

During posting, a purchase invoice of ₦45,000 was mistakenly debited to Purchases and credited to Cash instead of Creditors. In a separate transaction, a sales return of ₦12,000 was recorded as a debit to Sales Returns and credit to Cash, whereas it should have been a debit to Cash and credit to Sales Returns. After these errors the trial balance still shows total debits equal to total credits. Identify the effect of each error on the trial balance and calculate how the Cash and Creditors balances should be adjusted to reflect the correct amounts.

A. The trial balance is unaffected. Cash should be increased by ₦57,000 and Creditors should be increased by ₦45,000.

B. The trial balance is unaffected. Cash should be increased by ₦69,000 and Creditors should be increased by ₦30,000.

Correct C. The trial balance is unaffected. Cash should be increased by ₦69,000 and Creditors should be increased by ₦45,000.

D. The trial balance is affected. Cash should be increased by ₦69,000 and Creditors should be increased by ₦45,000.

Correct Answer: C

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 24 View Details

XYZ Ltd reported the following equity items at 31 December 2021: Share capital (ordinary) ₦10,000,000; Share premium ₦2,500,000; Retained earnings ₦3,200,000; Treasury shares (cost) ₦800,000 (1,000 shares at ₦800 each). During 2022 the company: - Issued 500 new ordinary shares at ₦12 each (par value ₦10). - Purchased additional treasury shares costing ₦500,000. - Declared and paid a dividend of ₦1 per share on all ordinary shares outstanding at the beginning of the year (excluding treasury shares). - Reported profit after tax of ₦1,800,000. Prepare the statement of changes in equity for 2022 and state the total equity at 31 December 2022.

Correct A. Total equity at 31 December 2022 = ₦15,207,000

B. Total equity at 31 December 2022 = ₦14,707,000

C. Total equity at 31 December 2022 = ₦15,207,500

D. Total equity at 31 December 2022 = ₦15,307,000

Correct Answer: A

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

Question 25 View Details

A cash receipt of ₦30,000 from a customer was recorded as a debit to Cash and a credit to Sales Revenue of only ₦25,000; the remaining ₦5,000 credit entry was omitted. Consequently, the trial balance shows total debits exceeding total credits by ₦5,000, and a suspense account with a credit balance of ₦5,000 was created. What journal entry should be passed to clear the suspense account, and what are the corrected balances of Cash and Sales Revenue after the adjustment?

A. Pass: Debit Suspense ₦5,000, Credit Sales Revenue ₦5,000. Corrected balances - Cash = ₦30,000; Sales Revenue = ₦35,000.

B. Pass: Debit Sales Revenue ₦5,000, Credit Suspense ₦5,000. Corrected balances - Cash = ₦30,000; Sales Revenue = ₦25,000.

C. Pass: Debit Suspense ₦5,000, Credit Cash ₦5,000. Corrected balances - Cash = ₦25,000; Sales Revenue = ₦30,000.

Correct D. Pass: Debit Suspense ₦5,000, Credit Sales Revenue ₦5,000. Corrected balances - Cash = ₦30,000; Sales Revenue = ₦30,000.

Correct Answer: D

Want to see the full step-by-step solution? Unlock AI Explanation & Analytics

waec model questions vol1 2021 financial_accounting | Objective

Master the Exam!

Help others prepare! Share this practice hub: