WAEC Financial Accounting 2019 past questions
Ten questions from the 2019 WAEC Financial Accounting paper, with answers and explanations. We hold 45 questions from this paper, and the Skolra app has all of them.
WAEC Financial Accounting 2019 questions and answers
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1.
Sulah took two textile materials worth N500 from his business for his children's use. This would be treated as
- ADrawingsCorrect
- BTrade liabilities
- CBusiness expenses
- DPurchases
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Answer: A
When a sole trader takes goods from the business for personal use, it is recorded as drawings. The entry is: debit Drawings account, credit Purchases (or Inventory) account, reducing the owner's capital balance.
- A
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2.
Goods bought from Sanmah for Le1,600 was entered into Shamail's Account.This is an error of
- AOriginal entry
- BOmission
- CCommissionCorrect
- DPrinciple
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Answer: C
An error of commission occurs when a transaction is recorded in the correct class of account but in the wrong personal account. Here, the purchase from Sanmah was correctly recorded as a credit purchase but posted to Shamail's account instead of Sanmah's account. The trial balance will still balance, so this error is not revealed by it.
- A
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3.
To show the evidence of payment to a government ministry, the revenue collector issues a
- AWarrant
- BInvoice
- CReceiptCorrect
- DVoucher
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Answer: C
A receipt is the official document issued by a revenue collector to a payer as written evidence that payment has been made to the government ministry or agency. An invoice is a request for payment, a warrant authorizes government expenditure, and a voucher is an internal document used to authorize payments.
- A
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4.
Subscription owing $ 6,000 (31/12/2014);
Subscription in advance $ 4,000 (31/12/2014);
Cash received as subscription during the year was $ 80,000.The subscription for the year 2014 was?
- A$84,000
- B$76,000
- C$78,000
- D$82,000Correct
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Answer: D
Subscription income = Cash received + Closing subscriptions owing − Closing subscriptions in advance = $80,000 + $6,000 − $4,000 = $82,000. Subscriptions owing are income earned but not yet received (they increase income), while subscriptions in advance are cash received but not yet earned for the current year (they reduce income). Opening balances are assumed nil as no figures are given.
- A
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5.
Companies issue shares to the public in order to
- ADistribute profits to employees
- BReduce their annual tax liability
- CReduce their total liabilities
- DRaise long-term capitalCorrect
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Answer: D
Companies issue shares to the public primarily to raise long-term equity capital for business operations, expansion, or investment. Shareholders become part-owners and provide funding in exchange for dividends and capital appreciation. Share issues increase equity, not reduce liabilities.
- A
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6.
Where fixed capital account is maintained, partners' share of profit is transferred to the
- ADrawings account
- BCapital account
- CCurrent accountCorrect
- DProfit and loss account
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Answer: C
Under the fixed capital method, partners' capital accounts remain unchanged. All profit shares, interest on capital, salaries, and drawings are instead recorded in each partner's current account, which fluctuates from year to year.
- A
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7.
When bank charges are deducted from a customer's account, the balance on the bank statement would be
- ATransferred to another account
- BUnchanged
- CIncreased
- DDecreasedCorrect
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Answer: D
Bank charges are debited to the customer's account by the bank, which directly reduces the credit balance shown on the bank statement. From the customer's perspective, bank charges are an expense that reduces the funds available. This is why bank charges not yet entered in the cash book cause a discrepancy in bank reconciliation.
- A
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8.
Where there is provision for depreciation, fixed asset is shown in the balance sheet at
i.cost less depreciation for the period only.
ii. cost less total depreciation to date.
iii. written down values- Ai only
- Bi, ii and iii
- Cii only
- Dii and iii onlyCorrect
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Answer: D
When a provision for depreciation account is maintained, fixed assets are shown in the balance sheet at cost less total accumulated depreciation to date (option ii), which is identical to the written down value or net book value (option iii). Option i is incorrect because only deducting the current period's depreciation would ignore all prior years' charges.
- A
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9.
The mark-up on a product is 2/3. The margin is
- A1/2
- B2/5Correct
- C1/3
- D2/3
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Answer: B
Mark-up = Profit ÷ Cost = 2/3. Assuming cost = 3 and profit = 2, the selling price = 3 + 2 = 5. Margin = Profit ÷ Selling price = 2/5. The margin is always a smaller fraction than the mark-up because the denominator (selling price) is always larger than the cost.
- A
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10.
A quality of accounting information is that it should be
- ARelevant and reliableCorrect
- BBased only on cash transactions
- CComplex and detailed for management use only
- DAccessible exclusively to shareholders
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Answer: A
For accounting information to be useful, it must be relevant (capable of influencing the decisions of users) and reliable (free from material error and bias, faithfully representing the economic reality it purports to depict). These are two of the fundamental qualitative characteristics of useful financial information under generally accepted accounting frameworks.
- A
The questions come from past JAMB, WAEC and NECO papers. We use software to help write the answer options and explanations, and every answer is checked twice before it goes on the site. How we check
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Practise all 45 questions we hold from the 2019 paper, on a timed CBT screen
Every question has the answer and an explanation, in the Skolra app.