Correct WAEC Financial Accounting Answers for Objective and Essay 2023/2024. Download likely Accounting Expo/runs for WAEC SSCE free here. Candidates who need good grades in the ongoing exams with our Financial Accounting WAEC Questions and Answers For Paper 1 & 2 are hereby welcome. See the latest news on the accounting Exams solutions to Questions below.
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you are in your last stage of Secondary School Education (May/June) or not in the School system (GCE), the importance of using old exam papers in preparing for your West African Senior School Certificate Examination (WASSCE), cannot be over emphasised. By using past exam papers as part of your preparation, you can find out what you already know. By the same token you also find out what you do not know well enough or don’t know at all.
What is more, the WAEC past questions for Financial Accounting can also be used as an organisational tool to manage your time better, as you can plan according to each section of the paper.
As a matter of fact, revision is more better than memorising facts and going over notes. You can practise for your Financial Accounting WAEC Exam by answering real questions from past papers. This will give you a better chance of passing.
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1a
_*FINANCIAL ACCOUNTING LOADING, STAY CALM *_
1a
Incomplete records refer to a condition wherein; an establishment is not practising double-entry bookkeeping. Instead, it is practising an unconventional accounting system, namely, a single-entry system, to sustain a decreased amount of data about its financial results.
1b
(1) As double entry system is not followed, a trial balance cannot be prepared and accuracy of accounts cannot be ensured.
(2) Correct ascertainment and evaluation of financial result of business operations can not be made.
3)Accurate evaluation and ascertainment of the financial outcome of business operations cannot be done.
4) The owners encounter numerous challenges in registering an insurance claim in case of loss of inventory, either by fire or theft.
5). It becomes hard to convince the income tax authorities about the reliability of the computed income
(1c)
(i) He has no knowledge or lack of knowledge about the accounting principles and concepts.
(ii)The double entry system is comparatively an expensive way of maintaining the financial accounts. The accountants may charge a handsome amount as fees.
(iii)Maintaining incomplete records consumes less time.
(iv)It is more convenient to maintain records as per the single entry system.
4b)
1. Accounting ratios may be very useful for forecasting likely events in the future since past ratios indicate trends in costs, sales, profit and other relevant facts.
2. Ideal ratios can be established and the relationships between primary ratios may be used to establish the desirable co-ordination or balance. Normally, this is linked with the Budgetary Control.
3. Control may be materially assisted by the use of ratios and can be made effective.
4a) Accounting ratios, an important sub-set of financial ratios, are a group of metrics used to measure the efficiency and profitability of a company based on its financial reports. They provide a way of expressing the relationship between one accounting data point to another and are the basis of ratio analysis.
Absolute liquidity ratio =(Cash + Marketable Securities)÷ Current Liability =(2188+65) ÷ 8035 = 0.28.
Waec Financial Accounting
Number 2
(2a) Purchase of consumables posted to purchases account:
Error: The consumables purchase was incorrectly posted to the purchases account.
Effect on trial balance: The error would cause an understatement of purchases and an overstatement of another account (possibly consumables).
Impact on trial balance agreement: The error affects the trial balance totals since it misstates the purchases account and potentially another account.
(2b) An invoice amount incorrectly posted to purchases day book:
Error: The invoice amount was posted incorrectly to the purchases day book.
Effect on trial balance: This error would result in an understatement of the purchases account and possibly an overstatement of another account (possibly a day book).
Impact on trial balance agreement: The error affects the trial balance totals as it misstates the purchases account and potentially another account.
(2c) Returns outwards posted to the personal account only:
Error: The returns outwards were only posted to the personal account, likely omitting the correct accounts affected.
Effect on trial balance: This error could lead to an understatement of returns outwards and an overstatement or omission of another account.
Impact on trial balance agreement: The error affects the trial balance totals as it misstates the returns outwards account and potentially another account.
(2d) The total sales of N 120,000 was recorded as N 102,000:
Error: The total sales amount was recorded incorrectly as N 102,000 instead of N 120,000.
Effect on trial balance: This error would cause an understatement of sales and possibly an overstatement or omission of another account.
Impact on trial balance agreement: The error affects the trial balance totals as it misstates the sales account and potentially another account.
(2e) Payment of cheque to Ige entered on the receipt side of the cash book and credited to Ige’s account:
Error: The payment of the cheque to Ige was incorrectly entered on the receipt side of the cash book and credited to Ige’s account.
Effect on trial balance: This error would result in an overstatement of receipts and an incorrect entry in Ige’s account.
Impact on trial balance agreement: The error affects the trial balance totals as it misstates the receipts account and potentially Ige’s account.
(1a)
Incomplete records are financial records that do not contain all necessary information required for the preparation of financial statements.
(1b)
(i)Difficulty in establishing accountability and ownership of assets and liabilities.
(ii)Inability to accurately determine the profitability of the business.
(iii)Difficulty in making informed decisions as the records do not provide adequate information.
(1c)
(i)Lack of knowledge and skills required for record-keeping.
(ii)Cost and time constraints.
(iii)The absence of regulatory requirements mandating complete record-keeping.
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(2a)
The error in this transaction is that consumables should be posted to the consumables account instead of the purchases account. This error will affect the agreement of the trial balance totals.
(2b)
The error in this transaction is that an invoice amount should be posted to the purchases ledger account instead of the purchases day book. This error will not affect the agreement of the trial balance totals.
(2c)
The error in this transaction is that returns outwards should be posted to both the personal account and the returns outwards account. This error will not affect the agreement of the trial balance totals.
(2d)
The error in this transaction is that the cheque payment to Ige was posted on the receipt side of the cash book instead of the payment side, and credited to Ige’s account. This error will affect the agreement of the trial balance totals.
(2e)
Payment of cheque to Ige entered on the receipt side of the cash book and credited to Ige’s account:
Error: The payment of the cheque to Ige was incorrectly entered on the receipt side of the cash book and credited to Ige’s account.
Effect on trial balance: This error would result in an overstatement of receipts and an incorrect entry in Ige’s account.
Impact on trial balance agreement: The error affects the trial balance totals as it misstates the receipts account and potentially Ige’s account.
(3)
(i) Management/Owners
(ii) Investors/Shareholders
(iii) Lenders/Creditors
(iv) Employees/Workers
(v) Government Agencies/Tax Authorities
(i) Management/Owners: The management or owners of a business are interested in accounting information for various purposes. They rely on financial statements and reports to assess the financial performance of the business, make strategic decisions, evaluate profitability, monitor cash flow, and determine the overall financial health of the company. They need accurate and timely accounting information to effectively manage the business and plan for the future.
(ii) Investors/Shareholders: Investors and shareholders are interested in accounting information to evaluate the financial position and performance of a company. They use financial statements and reports to assess the profitability, liquidity, and solvency of the business. This information helps them make investment decisions, evaluate the company’s growth potential, and assess the value of their investments.
(iii) Lenders/Creditors: Lenders and creditors, such as banks or suppliers, rely on accounting information to assess the creditworthiness and financial stability of a business. They use financial statements, particularly the balance sheet and cash flow statement, to evaluate the company’s ability to repay loans or fulfill its financial obligations. Accurate accounting information helps lenders and creditors determine the level of risk associated with extending credit or lending money.
(iv) Employees/Workers: Employees and workers have an interest in accounting information, especially regarding their compensation and benefits. They rely on accurate accounting records to ensure proper calculation of salaries, wages, bonuses, and benefits. Accounting information also helps employees understand the financial health of the company, which may impact job security and potential growth opportunities.
(v) Government Agencies/Tax Authorities: Government agencies and tax authorities require accounting information to ensure compliance with tax regulations, financial reporting standards, and other legal requirements. They use financial statements, tax returns, and supporting documentation to assess tax liabilities, enforce regulations, and monitor financial transparency. Accurate accounting information is crucial for businesses to fulfill their legal obligations and avoid penalties or legal issues.
Number 4
4a)Accounting ratios are used to analyze financial information and to evaluate the financial health of a company. Ratios are calculated by dividing one financial statement item by another. For example, a company’s current assets can be divided by its current liabilities to calculate its current ratio.
Liquidity ratios are a type of accounting ratio that measures a company’s ability to meet its short-term financial obligations. One example of a liquidity ratio is the current ratio, which is calculated by dividing a company’s current assets by its current liabilities. The current ratio measures a company’s ability to pay off its short-term debts using its short-term assets. A higher current ratio indicates that a company is more likely to be able to meet its short-term financial obligations, while a lower current ratio indicates that a company may have difficulty meeting these obligations.
4b)
Three uses of accounting ratios are:
1. To evaluate a company’s financial performance – Accounting ratios can be used to assess a company’s profitability, liquidity, efficiency, and solvency. By comparing a company’s ratios to industry benchmarks or to its own historical performance, investors and managers can evaluate the company’s financial health and identify areas for improvement.
2. To make investment decisions – Accounting ratios can be used by investors to evaluate the financial health of a company and to make investment decisions. By analyzing a company’s ratios, investors can assess the company’s profitability, liquidity, and risk, and can decide whether to buy or sell the company’s stock.
3. To monitor financial performance – Accounting ratios can be used by managers to monitor the financial performance of a company and to identify areas for improvement. By tracking ratios over time, managers can identify trends and patterns in the company’s financial performance, and can take action to improve profitability, efficiency, or other metrics.
4c)
Three limitations of the use of accounting ratios are:
1. Comparability – Accounting ratios are most useful when comparing a company’s ratios to industry benchmarks or to its own historical performance. However, different companies may use different accounting methods or may have different business models, which can make it difficult to compare ratios across companies. This can limit the usefulness of accounting ratios for investors and managers.
2. Manipulation – Companies may manipulate their financial statements in order to improve their accounting ratios. For example, a company may delay paying its bills in order to improve its current ratio. This can make it difficult for investors and managers to use accounting ratios to evaluate a company’s financial health.
3. Lack of context – Accounting ratios provide a snapshot of a company’s financial performance at a particular point in time. However, they do not provide context about the company’s business model, industry trends, or other factors that may affect its financial performance. This can limit the usefulness of accounting ratios for making investment or business decisions.
F/ ACCOUNT OBJ:
1-10: BBBCDCACCB
11-20: CADBAABAAC
21-30: DDDCBBABDB
31-40: BCCADCDBAC
41-50: BBDBCCBBAB
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