WAEC 2018 Financial Accounting Expo Runz ON OBJ And Theory Questions and Answers
2018 MAY/JUNE WAEC F. ACCOUNTING ANSWERS
VERIFIED F. ACCOUNTING OBJ ANSWERS
FINANCIAL ACCOUNTING THEORY EXPO FROM EXAMHOT. COM
(i) It can result in a business exhausting the budget, leading to spending more than
what is coming in.
(ii) Businesses may need to file for bankruptcy or shut their doors if they fail to keep adequate records from the
(iii) It can result in problems with suppliers, payroll, utilities, and other vital components to a running successful business.
(i) Relevance means an account information to make a difference in decision making
(ii) Comparability means an account information can be used to compare different entities
(iii) Consistency: information is consistently presented from year to year
(iv) Reliability means an account information is verifiable, factual, and neutral
(i) Accounting information is historical in nature
(ii) There is no information as to usefulness, size or quantity because accounting is expressed in monetary terms
(i) Direct material cost: It is the expenditure incurred on raw materials which can be traced to a particular production unit.
Example: Orange in fanta making.
(ii) Direct labour cost: This refers to the wages of employees who are directly to engaged in the production process.
Example: Wage of machine operator.
(iii) Factory overhead: It relate to expenditure incurred in running the factory which cannot be traced to a particular production unit.
Example: Indirect wages.
(i) Opening stock: This is the brought-forward stocks from the previous year.
(ii) Closing stock: This is the stock at the end of every trading year
(iii) Work-in-progress: This the total value of the materials and labour for unfinished projects.
Where a big business with diverse trading activities is conducted under the same roof the same is usually divided into several departments and each department deals with a particular kind of goods or service. For example, a textile merchant may trade in cotton, woolen and jute fabrics. The overall performance for this type of business depends, however, on departmental efficiency.
(i) It helps the management to make proper plan of action, policies in order to increase profit after analysing the results of operation of various departments.
(ii) Departmental accounting helps us to understand which department should be expanded further or which one should be closed down as per the results of the operation.
Cash book Adjustment
Bal bld N 48,500
interest on investment N 2500
credit transfer N 3000
Bank Charges N 1000
Dishonured cheques N 2000
bal cld N 51,000
Total Bal bld N 51,000
Bank Reconcilation statement at 31/ 12/ 2016
balance as per adjusted cash book N N 51,000
add unpresented cheques 8850
add back wrong credit 3500
12,350 / 63,350
less uncredited cheques ( 8450)
balance as per bank statement N 54,900
Statement Of affairs as at 1 | 1 | 06
Capital ( Opening ) N 30,000
Creditors N 1 ,000
Insurance N 2 ,000
Land And Building N 15,000
Motor Vechicle N 6 ,000
Stock N 4 ,000
Cash N 6 ,000
Debtors N 2 ,000
Trading Profit and loss account for the year ended 31st december 2016
opening stock N 4000
purchases N 11,500
Closing Stock ( 2 ,000 )
Cost of goods sold 13500
gross profit cld 17500
salaries N 5000
rent and rates N 4000
insurance N 5000
dep on motor vechicle N 2000
net profit N 1500
Sales N 31,000
gross profit b | d N 17,500
Balance Sheet as at 31| 12| 2006
Capital N 30,000
add net profit N 1500
creditor N 500
insurance Owning N 6000
Land and Building N 15,000
motor vehicle N 4000
stock N 2000
debtors N 3000
Cash N 14,000
Obihan trading profit and loss account
SALES = 1,200,000
Less return inward =
Less cost of sales
Opening stock = 3000,000
Add purchase 1,050,000
Less return outward = 18,600
Cost of goods available. =1,331,400
Less closing stock=360,000
Cost of goods sold=971,400
LESS OPERATIVE EXPENSIVE
Rates (18,000 1,500) = 16,500
Rates ( 18,000 660) = 3,660
Salaries (90,000 15,000) = 105,000
Bad Debits = 600
Insurance = 93,000
Depreciation: Furniture 9,000
Machineries = 18,000
Provision for bad debit = 540
NET LOSS 246,300
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