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WAEC GCE 2017 - ACCOUNTING THEORY AND OBJ ANSWERS

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WAEC GCE - ACCOUNTING ANSWERS

Exam Time: Thursday, 7th September, 2017
Financial Accounting 2 (Theory)
9.30am – 12noon
Financial Accounting 1 (Objective)
12noon – 1.00pm
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ACCOUNT OBJ:
1-10: AAABADDDDA
11-20: CBBBBBAACC
21-30: BADBDADDDD
31-40: AACDBADDAA
41-50: BBCBBBAAAD
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(1a)
(i)trade discount An amount or rate by which the catalog, list, or retail price of an item is reduced when sold to a reseller.
(ii)cash discount is a deduction allowed
by the seller of goods or by the provider of services in order to motivate the customer to pay within a specified time.
(iii)bad debt is a monetary amount owed to a creditor that is unlikely to be paid and, or which the creditor is not willing to take action to collect because of various reasons, often due to the debtor not having the money to pay
(iv)provision for doubtful debts is the estimated amount of bad debt that will arise from accounts receivable that have been issued but not yet collected.
(v)bad debt recovery is business debt from a loan, credit line or accounts receivable that is recovered either in whole or in part after it has been written off or classified as a bad debt.

(1b)
(i)Error of commission
(ii)Error of principle
(iii)Error of compensation
(iv)Error of original entry
(v)Error of transition


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(3a)
A suspense account is an account used on a temporary basis for any transaction or balance that cannot be identified.

(3bi)
A provision is the amount of an expense or reduction in the value of an asset that an entity elects to recognize now in its accounting system, before it has precise information about the exact amount of the expense or asset reduction while Reserve is an appropriation of profits for a specific purpose. The most common reserve is a capital reserve, where funds are set aside to purchase fixed assets. By setting aside a reserve, the board of directors is segregating funds from the general operating usage of a company.

(3bii)
Expense is the term for a cost incurred in the process of producing or offering a primary business operation while revenue is the term used to describe income earned through the provision of a business' primary goods or services.

(3ci)
Capital reserve denotes funds set aside out of profits generated from exceptional transactions not occuring inordinary course of business.e.g sale of Assets (being a going concern), Profits arising in Forfeiture of Shares due to non payment of calls in arrear etc.They are not available for distribution to share holders in normal circumstances.

(3cii)
Revenue reserve denotes profits set aside from transactions involving ordinary & usual business activities.e.g sale of goods & services, investment profits if it is in ordinary course of business etc.They are available for distribution to share holders in normal circumstances.


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FOR SECTION B, USE THE IMAGE BELOW

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