2021 WAEC Financial Accounting Question and Answers (Practice and Syllabus)

2021 WAEC Financial Accounting Question and Answers (Practice and Syllabus)

1. Explain the following:
(a) imprest system;
(b) petty cash book;
(c) memorandum entries;
(d) three-column cash book;
(e) journal proper.

2. (a) Define and list two classifications of each of the following:
i. asset;
ii. liabilities.
(b) State and explain the factors to be considered in determining the annual depreciation charge for a fixed asset.

3. Describe three features of each of the following financial statements:
(a) Receipts and Payment Account;
(b) Income and Expenditure Account;
(c) Trading Account;
(d) Profit and Loss Account;
(e) Appropriation Account of a Partnership.

ANS: (a) Receipt and Payment Account–
– It is a real account;
– It is a prime book;
– It is a summary of cash and cheque transactions of a club;
– It has an opening and closing balances;
– It records both capital and revenue transactions;
– Its closing balance is transferred into the balance sheet;
– Its records are supported by source documents;
– It is used by “Not-for-Profit Making” organizations.
(b) Income and Expenditure Account – It is a nominal account;
It is prepared in the form of profit and loss accounts;
It records revenue receipts and revenue expenditure;

It allows adjustments for prepayments and accruals;
Its closing balance represents surplus or deficit;
It is used by not-for-profit making organizations.
(c) Trading Account – It is a nominal account;
It is prepared by trading entities;
It is used to determine the cost of goods available for sale;
It is used to determine the cost of goods sold;
It is used to ascertain gross profit or gross loss.
(d) Profit and Loss Account – It is a nominal account;
It is prepared by trading entities;
It is used to ascertain net profit or net loss;
It allows adjustments for accruals and prepayments.
(e) Appropriation Account of a Partnership – It is a nominal account;
It is an account in which the profit /loss for the partners is distributed;
It shows the net profit /loss brought down for the period;
It shows interest in partners’ drawings;
It shows partners’ salaries for the period;
It shows partners’ commission;
It shows interest in partners’ capital.

4.

FINANCIAL ACCOUNTING PRACTICE

5. This question required candidates to prepare the Manufacturing, Trading, Profit, and Loss Account to show:
(a) Cost of raw material used;
(b) Prime cost;
(c) Cost of production;
(d) Gross manufacturing profit;
(e) Gross profit on sales;
(f) Net profit.

6. In this question, candidates were required to prepare:
(a) Adjusted Cash Book
(b) Bank Reconciliation Statement.

7. In this question, candidates were required to prepare:
(a) Trading, Profit and Loss Account;
(b) Profit and Loss Appropriation Account.

8.

WAEC Financial Accounting Objectives.
1. Which of the following explains the imprest system of operating petty cash?
A. Weekly expenditure cannot exceed a set amount
B. The exact amount of expenditure is reimbursed at intervals to maintain a fixed float
C. All expenditure out of the petty cash must be properly authorized
D. Regular equal amounts of cash are transferred into petty cash at intervals.

2. Which TWO of the following errors would cause the total of the debit column and the total of the credit column
of a trial balance not to agree?

(1) A transposition error was made when entering a sales invoice into the sales day book
(2) A cheque received from a customer was credited to cash and correctly recognized in receivables
(3) A purchase of non-current assets was omitted from the accounting records
(4) Rent received was included in the trial balance as a debit balance

A. 1 and 2
B. 1 and 3
C. 2 and 3
D. 2 and 4

3. Peter has not kept accurate accounting records during the financial year. He had an opening inventory of N6,700 and purchased goods costing N84,000 during the year. At the year-end, he had N5,400 left in inventory. All sales are
made at a mark upon the cost of 20%.
What is Peter’s gross profit for the year?
A. N13,750
B. N17,060
C. N16,540
D. N20,675.

4. Shasia Co extracted the trial balance for the year ended 31 December 2017. The total of the debits exceeded the
credits by N300.
Which of the following could explain the imbalance?
A. Sales of N300 were omitted from the sales day book
B. Returns inward of N150 were extracted to the debit column of the trial balance
C. Discounts received of N150 were extracted to the debit column of the trial balance
D. The bank ledger account did not agree with the bank statement by a debit of N300.