waec gce 2023 second series financial Accounting questions and answers >> Waec gce account expo, real questions and answers for Nov/Dec 2023 candidates
ACCOUNTING OBJECTIVE ANSWERS
ACCOUNTING ESSAY ANSWERS
(PICK ANY THREE)
(i) Purchase of goods for resale
(ii) Receiving goods as a gift or donation
(iii) Return of goods purchased from suppliers
(iv) Transfer of goods from one location to another within the company
(v) Manufacturing or producing goods
(iv) Conversion of raw materials into finished goods
Goodwill is an intangible asset that represents the reputation, customer loyalty, and brand value of a business. It is an asset that is not easily measurable or physically quantifiable but can have a significant impact on the value and success of a business. Goodwill is associated with qualities such as trust, customer satisfaction, and positive relationships with stakeholders.
(i) Water charges paid: Utility bill or receipt from the water company
(ii) Credit sales: Sales invoice or sales receipt
(iii) Credit purchases: Purchase invoice or purchase receipt
(iv) Wages: Payroll record or wage slip
(V) Cash payment: Cash receipt or payment voucher
(vi) Electricity owed: Utility bill or invoice from the electricity provider
(vii) Returns by customers: Sales return slip or return receipt
(viii) Returns to suppliers: Purchase return slip or return receipt
(ix) Cheque deposit: Deposit slip or bank statement
(x) Dishonoured cheque: Bank statement or notification from the bank indicating the dishonored cheque.
The manufacturing account is a financial statement that shows the cost of producing goods in a manufacturing company. It includes direct materials, direct labor, and factory overhead expenses.
(i) Direct materials: These are the raw materials or components used in the production process.
(ii) Direct labor: This refers to the wages or salaries paid to the workers directly involved in the manufacturing process.
(iii) Direct expenses: These are other costs directly associated with the production, such as fuel or specific tools.
(i) Prime cost: It refers to the total cost of direct materials, direct labor, and direct expenses. It represents the main components of the production cost.
(ii) Factory overhead: Also known as indirect costs, factory overhead includes all the expenses incurred in the production process that are not directly attributable to specific units. It includes costs like rent, utilities, depreciation, and maintenance.
(iii) Work-in-progress: Work-in-progress (WIP) refers to goods that are in the process of being manufactured but are not yet finished. It represents the value of partially completed products at a specific point in time.
(iv) Finished goods: Finished goods are the completed products that are ready for sale to customers. They have gone through the entire manufacturing process and are in their final form.
(v) Market value of goods produced: The market value of goods produced refers to the estimated selling price of the finished goods at the time they are produced. It represents the value of the goods based on market demand and other factors.
Bad debt refers to an amount that is considered uncollectible and is unlikely to be recovered by a business from its customers or debtors. When a customer fails to fulfill their obligation to pay, and it becomes evident that the amount is not recoverable, the business may classify that portion of the accounts receivable as a bad debt.
Bad debt refers to an amount that is unlikely to be recovered by a business from its customers or borrowers. This typically occurs when a customer fails to pay back a credit sale or a borrower defaults on a loan.
(PICK ANY FIVE)
(i)Customer Bankruptcy: If a customer declares bankruptcy, it may become evident that the business will not be able to collect the outstanding debt.
(ii)Persistent Non-payment:If a customer consistently fails to make payments despite multiple attempts to collect, it may indicate a need to write off the debt.
(iii)Inability to Locate the Customer: When the business cannot locate the customer, making it impossible to pursue payment.
(iv) Death of the Debtor: In cases where the debtor passes away and there are no assets or guarantors to cover the debt.
(v)Legal Judgments: If legal actions have been taken, and it becomes evident that the collection efforts will not result in the recovery of the debt.
(vi)Financial Hardship of the Debtor: If the debtor is facing significant financial hardship, making it unlikely for them to repay the debt.
(PICK ANY FOUR)
(i)Bad Debt Recognized when a specific receivable is confirmed as uncollectible and is written off. WHILE
Provision for Doubtful Debts Established in anticipation of potential future bad debts before they are individually identified.
(ii)Bad Debts represents actual, confirmed losses on specific receivables. WHILE Provision for Doubtful Debts represents an estimated amount set aside to cover potential future losses based on a general assessment of credit risk.
(iii)Bad Debts recognized as an expense in the income statement. WHILE Provision for Doubtful Debts reflected as a contra-asset on the balance sheet, reducing the reported value of accounts receivable.
(iv)Bad Debts relates to identified, individual accounts that are deemed uncollectible. WHILE
Provision for Doubtful Debts is a general estimate that applies to the entire accounts receivable balance
(v)Bad Debts triggered by the confirmation that a specific receivable is uncollectible. WHILE Provision for Doubtful Debts established based on historical data, industry norms, and an overall assessment of the creditworthiness of customers, irrespective of individual account statuses.
( Pick Any Three )
(i) The liability of the owners is limited to their investment in the company.
(ii) The company is a legal entity; as a result, it can sue and be sued.
(iii) The affairs of the company is managed by Board of Directors as ownership is separated from management.
(iv) In case of liquidation, the company’s assets will be used to settle debts.
(v) The company’s authorized capital is divided into shares.
(vi) The affairs of the company are governed by memorandum and article of association, formation or incorporation.
(vii) Dividend is based on the number of shares owned/Return on investment is called dividend.
(viii) The shares are quoted on the stock exchange in case of Public Limited Company while the shares are not quoted in case of Private Limited Company.
( Pick Any Three )
(i) Companies have limited liability, whereas partners in a partnership have unlimited liability.
(ii) Companies can raise capital by issuing shares, whereas partnerships cannot.
(iii) Companies can sell shares to the public, whereas partnerships cannot.
(iv) Companies are subject to more regulation than partnerships.
(v) Companies have a more complex structure than partnerships.
( Pick Any Three )
(i) Voting power
(iii) The right to transfer ownership,
(iv) A claim to dividends,
(v) The right to inspect corporate documents
(vi) The right to sue for wrongful acts.