Practice waec model questions vol1 financial_accounting 2023 Past Questions

Question 1 View Details

The following unadjusted trial balance of XYZ Ltd is given (all figures in ₦): | Account | Debit | Credit | |--------------------------------|-------|--------| | Machinery | 150,000 | | | Accumulated Depreciation - Machinery | | 30,000 | | Cash | 20,000 | | | Accounts Receivable | 15,000 | | | Accounts Payable | | 10,000 | | Salaries Expense | 45,000 | | | Rent Expense | 12,000 | | | Sales Revenue | | 120,000 | | Capital | | 80,000 | Adjusting entries for the year are: 1. Depreciation on Machinery is 12 % of its cost. 2. Salaries of ₦8,000 have been incurred but not yet paid. 3. ₦3,000 of the rent expense recorded relates to rent prepaid for the next period. After posting the adjusting entries, the profit and loss account is closed to the Capital account. What is the balance in the Capital account after posting the adjusting entries and the closing entries?

A. 108000

B. 132000

C. 100000

Correct D. 120000

Correct Answer: D

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Question 2 View Details

A company sold goods for cash ₦30,000. The cost of the goods sold was ₦18,000. Determine the effect of this transaction on each component of the accounting equation (Assets, Liabilities, Owner's Equity).

A. Assets increase by ₦30,000; Liabilities unchanged; Owner's Equity increases by ₦12,000

B. Assets increase by ₦12,000; Liabilities unchanged; Owner's Equity decreases by ₦12,000

C. Assets increase by ₦12,000; Liabilities increase by ₦2,000; Owner's Equity increases by ₦10,000

Correct D. Assets increase by ₦12,000; Liabilities unchanged; Owner's Equity increases by ₦12,000

Correct Answer: D

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Question 3 View Details

The bank statement of ABC Co shows a closing balance of ₦85,000. The cash book (per books) shows a closing balance of ₦88,500. The following items are known: - Outstanding checks: ₦4,200 - Deposits in transit: ₦3,600 - Bank service charge (not yet recorded in the cash book): ₦150 - Interest earned (not yet recorded in the cash book): ₦200 - An error in the cash book where a payment of ₦2,500 was recorded instead of the actual ₦2,000. After making all necessary adjustments, what is the corrected cash book balance?

Correct A. 89050

B. 89300

C. 88500

D. 87850

Correct Answer: A

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Question 4 View Details

A business purchases equipment on credit for ₦25,000. State the journal entry that records this transaction, indicating the accounts affected and whether each is debited or credited.

Correct A. Debit Equipment 25000; Credit Accounts Payable 25000

B. Debit Equipment 25000; Credit Accounts Payable 20000

C. Debit Equipment 25000; Credit Cash 25000

D. Debit Equipment 20000; Credit Accounts Payable 25000

Correct Answer: A

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Question 5 View Details

During the month, the company paid ₦12,000 cash for its electricity expense. Record the journal entry for this transaction.

A. Debit Utilities Expense 12000; Credit Cash 12000

B. Debit Electricity Expense 12000; Credit Accounts Payable 12000

C. Debit Electricity Expense 12000; Credit Cash 10000

Correct D. Debit Electricity Expense 12000; Credit Cash 12000

Correct Answer: D

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Question 6 View Details

A merchandising firm recorded the following figures for the year: Sales = ₦1,200,000; Opening stock = ₦200,000; Purchases = ₦800,000; Purchase returns = ₦30,000; Carriage inwards = ₦20,000. The gross profit is known to be 25% of sales. Determine the value of the closing stock.

A. 110,000

Correct B. 90,000

C. 80,000

D. 100,000

Correct Answer: B

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Question 7 View Details

At the beginning of the year, XYZ Ltd had the following equity items: Share capital (ordinary) ₦5,000,000 (par value ₦10 per share), Share premium ₦1,200,000, Revaluation reserve ₦300,000, Retained earnings ₦800,000. During the year the company: (i) issued 20,000 ordinary shares at ₦15 each; (ii) revalued a building, creating a revaluation surplus of ₦500,000; (iii) declared and paid an ordinary dividend of 10% on the ordinary share capital (based on par value); (iv) purchased its own shares costing ₦250,000; (v) transferred ₦100,000 from retained earnings to a general reserve. Compute the total shareholders' equity at the end of the year.

A. 7,250,000

B. 7,450,000

C. 7,300,000

Correct D. 7,350,000

Correct Answer: D

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Question 8 View Details

Which fundamental accounting concept requires that expenses be recognised in the same accounting period as the revenues that they helped generate?

A. Consistency concept

Correct B. Matching concept

C. Revenue recognition concept

D. Historical cost concept

Correct Answer: B

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Question 9 View Details

The cash book (bank column) shows a debit balance of ₦150,000 at month‑end. The bank statement for the same date shows a debit balance of ₦120,000. The following items are identified: outstanding checks amounting to ₦25,000; deposits in transit amounting to ₦10,000; bank charges of ₦2,000 not yet recorded in the cash book; interest earned of ₦1,500 not yet recorded. After making all necessary adjustments, what should be the corrected balance in the cash book?

A. 147,500

Correct B. 149,500

C. 149,000

D. 150,500

Correct Answer: B

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Question 10 View Details

Three partners - A, B and C - run a business. Their opening capital balances are A: ₦500,000, B: ₦300,000, C: ₦200,000. The profit‑sharing ratio is 3:2:1. The following items occur during the year: interest on capital at 10% per annum; salaries - A receives ₦50,000, B receives ₦30,000, C receives none; interest on drawings at 6% per annum (drawings: A ₦80,000, B ₦50,000, C ₦40,000); and a profit before any of these adjustments of ₦240,000. Determine the total amount of partners' capital at the end of the year.

A. 1,069,800

B. 1,139,600

C. 1,159,600

Correct D. 1,059,600

Correct Answer: D

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Question 11 View Details

A company had opening balances: Cash ₦50,000; Trade receivables ₦30,000; Inventory ₦70,000; Equipment (cost) ₦100,000; Accumulated depreciation ₦0; Share capital and retained earnings ₦0. During the year the following transactions occurred: (i) Issued 5,000 shares at ₦200 each, the premium being ₦20 per share. (ii) Purchased equipment for ₦150,000 cash. (iii) Sold inventory costing ₦80,000 on credit for ₦120,000. (iv) Depreciated equipment at 10% per annum on its total cost. (v) Provided for doubtful debts at 5% of trade receivables. Assuming no other transactions, what is the closing retained earnings at year‑end?

A. 6000

B. 9000

Correct C. 7500

D. 8500

Correct Answer: C

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Question 12 View Details

Three partners A, B and C share profits in the ratio 3:2:1. Their capital balances are ₦120,000, ₦80,000 and ₦40,000 respectively. Goodwill of the firm is valued at ₦60,000. On 1 July, a new partner D is admitted, bringing in ₦30,000 cash for a 1/5 share of future profits. Existing partners agree that goodwill will be shared among them in the old profit‑sharing ratio and that D's cash will be distributed to them in the same ratio. At the same time the partnership revalues its building upward by ₦24,000 and its inventory downward by ₦6,000. Determine (a) the amount of goodwill attributable to D, and (b) the amount credited to each existing partner's capital account as a result of D's admission.

A. Goodwill attributable to D = 15000; Credits: A 60000, B 40000, C 20000

B. Goodwill attributable to D = 10000; Credits: A 48000, B 32000, C 16000

Correct C. Goodwill attributable to D = 12000; Credits: A 54000, B 36000, C 18000

D. Goodwill attributable to D = 12000; Credits: A 50000, B 35000, C 15000

Correct Answer: C

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Question 13 View Details

On 1 March, XYZ Ltd purchased inventory costing ₦45,000 on credit and paid freight of ₦3,000 in cash. Record the appropriate journal entries.

A. Inventory Dr 48000; Accounts Payable Cr 45000; Cash Dr 3000

Correct B. Inventory Dr 48000; Accounts Payable Cr 45000; Cash Cr 3000

C. Inventory Dr 45000; Accounts Payable Cr 45000; Cash Cr 3000

D. Inventory Dr 48000; Accounts Payable Cr 48000; Cash Cr 0

Correct Answer: B

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Question 14 View Details

X, Y and Z are partners sharing profits in the ratio 2:1:1. Their capital balances are X ₦150,000, Y ₦90,000 and Z ₦60,000. At dissolution the partnership holds cash ₦80,000, inventory (cost) ₦40,000 and equipment (net book) ₦70,000. Liabilities are a loan of ₦30,000 and creditors of ₦20,000. The inventory is found to be undervalued by ₦10,000 and the equipment overvalued by ₦5,000. Goodwill of ₦24,000 is to be written off equally among the partners. Calculate the amount each partner receives on dissolution.

A. X 75000, Y 50000, Z 20000

Correct B. X 76500, Y 49250, Z 19250

C. X 77000, Y 48000, Z 20000

D. X 76000, Y 49000, Z 20000

Correct Answer: B

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Question 15 View Details

A machine was purchased on 1 January 2022 for ₦500,000. Its estimated useful life is 5 years and its residual value is ₦50,000. 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. Compute (a) the depreciation expense for the year ended 31 December 2024 and (b) the book value of the machine on that date.

Correct A. Depreciation expense 43333.33; Book value 136666.67

B. Depreciation expense 90000.00; Book value 230000.00

C. Depreciation expense 72000.00; Book value 108000.00

D. Depreciation expense 150000.00; Book value 30000.00

Correct Answer: A

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Question 16 View Details

A manufacturing company uses the weighted‑average method for process costing. Opening work‑in‑process (WIP) consists of 1,500 units that are 40% complete for materials and 20% complete for conversion, with costs of ₦20,000 for materials and ₦25,000 for conversion. During the period 6,000 units were started. Costs added during the period are: Materials ₦180,000; Labour ₦90,000; Overheads ₦120,000. At the end of the period closing WIP contains 2,200 units that are 30% complete for materials and 50% complete for conversion. Calculate the cost per equivalent unit for conversion.

Correct A. ₦36.72

B. ₦39.43

C. ₦31.33

D. ₦32.81

Correct Answer: A

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Question 17 View Details

The cash book of XYZ Ltd shows a balance of ₦460,000. A cheque was mistakenly entered as ₦2,500 instead of the correct amount ₦2,350, causing an over‑statement of ₦150. Bank service charges of ₦1,200 and an NSF cheque of ₦3,400 have not yet been recorded in the cash book. Determine the corrected cash book balance after all adjustments.

A. ₦458,650

Correct B. ₦455,250

C. ₦455,550

D. ₦455,400

Correct Answer: B

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Question 18 View Details

A local government has the following budgeted expenditures for the year: Health ₦120,000; Education ₦150,000; Infrastructure ₦200,000. The actual expenditures were Health ₦130,000; Education ₦145,000; Infrastructure ₦210,000. During the year a transfer of ₦15,000 was made from the Education fund to the Infrastructure fund, and a grant of ₦20,000 was received and allocated to Health. Calculate the overall variance between the budgeted total and the actual total after taking the transfer and the grant into account, and state whether the result is a surplus or a deficit.

Correct A. ₦5,000 surplus

B. ₦2,000 surplus

C. ₦5,000 deficit

D. ₦10,000 surplus

Correct Answer: A

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Question 19 View Details

The trial balance of ABC Enterprises is shown below. One account has been entered on the wrong side (debit instead of credit or vice‑versa). Identify the account and state the correct side and amount needed to balance the trial balance. Cash Dr ₦90,000 Accounts Receivable Dr ₦40,000 Inventory Dr ₦30,000 Equipment Dr ₦100,000 Expenses Dr ₦40,000 Accumulated Depreciation Cr ₦20,000 Accounts Payable Cr ₦50,000 Bank Loan Cr ₦60,000 Capital Cr ₦120,000 Revenue Dr ₦50,000

Correct A. Revenue account - should be a credit of ₦50,000

B. Revenue account - should be a credit of ₦45,000

C. Expenses account - should be a credit of ₦50,000

D. Revenue account - should be a debit of ₦50,000

Correct Answer: A

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Question 20 View Details

An asset was purchased for ₦500,000. Its estimated residual value is ₦50,000 and its useful life is 5 years. The company uses the double‑declining‑balance (DDB) method, but switches to straight‑line depreciation when the DDB charge for a year would be less than the straight‑line charge for the remaining life. The first‑year depreciation expense has already been recorded. Determine the depreciation expense for the third year.

A. ₦66,000

Correct B. ₦72,000

C. ₦84,000

D. ₦78,000

Correct Answer: B

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Question 21 View Details

On 1 March a business purchased inventory costing ₦150,000 on credit. On 15 March it paid the supplier and received a cash discount of 2 % for early payment. Record the journal entry made on 15 March.

A. Accounts Payable Dr ₦150,000; Cash Cr ₦146,000; Purchase Discounts Cr ₦4,000

B. Accounts Payable Dr ₦150,000; Cash Cr ₦150,000; Purchase Discounts Cr ₦0

Correct C. Accounts Payable Dr ₦150,000; Cash Cr ₦147,000; Purchase Discounts Cr ₦3,000

D. Accounts Payable Dr ₦150,000; Cash Cr ₦148,500; Purchase Discounts Cr ₦1,500

Correct Answer: C

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Question 22 View Details

A manufacturing company produces a single product. The following data relate to the period: - Opening raw‑material stock: ₦200,000 - Purchases of raw material: ₦500,000 - Closing raw‑material stock: ₦150,000 - Direct labour cost: ₦300,000 - Manufacturing overhead is applied at 150 % of direct labour. - Opening work‑in‑process (WIP) is ₦80,000, consisting of 40 % material, 30 % labour and 30 % overhead. - Closing WIP is ₦70,000, consisting of 50 % material, 20 % labour and 30 % overhead. - Normal loss is 4 % of material input and is treated as part of production cost. - Abnormal loss is 5 % of material input and is recorded at 80 % of standard cost. What is the total cost of goods manufactured for the period?

A. 1200000

B. 1340000

C. 1250000

Correct D. 1288000

Correct Answer: D

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Question 23 View Details

The trial balance of a sole trader shows a net profit of ₦80,000 before considering errors. The following errors are discovered: (i) A sales transaction of ₦120,000 was recorded as a debit to Sales and a credit to Cash (i.e., the entries were reversed). (ii) A cash purchase of inventory for ₦45,000 was recorded twice, each time as a debit to Purchases and a credit to Cash. What is the corrected net profit after adjusting for these errors?

A. 350000

B. 200000

Correct C. 245000

D. 80000

Correct Answer: C

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Question 24 View Details

The following transactions were recorded in the Purchases Journal during January: 1. 5 Jan - Supplier A - ₦30,000 2. 12 Jan - Supplier B - ₦45,000 3. 20 Jan - Supplier A - ₦25,000 4. 28 Jan - Supplier C - ₦50,000 Later, a purchase return of ₦15,000 to Supplier B was recorded in the Purchase Returns Journal, and a cash discount of 2 % on the net purchases was allowed and recorded in the Cash Discount Journal. What is the net amount payable to all suppliers after accounting for the return and the discount?

A. 128250

B. 132000

Correct C. 132300

D. 135000

Correct Answer: C

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Question 25 View Details

A business keeps a double‑column cash book (Cash and Bank). The following transactions occurred during the month: Cash column - Opening balance: ₦20,000 Receipts: Cash sales ₦45,000; Received from debtors ₦30,000; Loan received ₦15,000 Payments: Rent ₦12,000; Salaries ₦18,000; Purchase of supplies ₦10,000 Bank column - Opening balance: ₦50,000 Receipts: Cheque from debtor ₦25,000; Transfer from cash ₦5,000 Payments: Cheque to supplier ₦20,000; ATM withdrawal ₦8,000 Bank reconciliation shows outstanding cheques of ₦6,000 and deposits in transit of ₦4,000. What is the corrected total cash balance (cash on hand plus adjusted bank balance) after reconciliation?

A. 122000

B. 115000

Correct C. 120000

D. 118000

Correct Answer: C

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