WAEC Financial Accounting 2020 past questions

Checked by the Skolra question team · Last updated 15 October 2026

Ten questions from the 2020 WAEC Financial Accounting paper, with answers and explanations. We hold 41 questions from this paper, and the Skolra app has all of them.

WAEC Financial Accounting 2020 questions and answers

1. 1.

   Items shown in the manufacturing account include
   i. Purchases of raw materials
   ii. Purchases of finished goods
   iii. Carriage inwards
   iv. Carriage outwards

   1. A
      ii and iv only
   2. B
      i and iii only
      Correct
   3. C
      i and ii only
   4. D
      iii and iv only
   Show answerHide answer

   Answer: B

   The manufacturing account includes costs directly related to production: purchases of raw materials (i) and carriage inwards on raw materials (iii). Purchases of finished goods appear in the trading account, and carriage outwards (selling cost) appears in the profit and loss account.

2. 2.

   The document which serves as the authority to incur expenditure in the public sector is

   1. A
      Budget estimate
   2. B
      Warrant
      Correct
   3. C
      Invoice
   4. D
      Requisition form
   Show answerHide answer

   Answer: B

   In public sector accounting, a warrant (appropriation warrant) is the official document issued by a competent authority that grants permission and sets limits for spending public funds. Expenditure cannot lawfully be incurred without a valid warrant authorising it.

3. 3.

   Income received in advance is treated in the balance sheet as a

   1. A
      Current asset
   2. B
      Long-term liability
   3. C
      Current liability
      Correct
   4. D
      Capital reserve
   Show answerHide answer

   Answer: C

   Income received in advance (deferred income) is cash received for services or goods not yet provided. The business still owes the service or goods to the payer, making it a current liability in the balance sheet. It will be recognised as income only in the period it is earned.

4. 4.

   Kwamenah bought goods worth Le 50,000 from Doe and Sons Limited on the following terms: 3% trade discount: 10% cash discount. Kwamenah returned defective goods worth Le 8,000 the next day and made payment for the
   remaining goods on the due date

   The cash paid by Kwamenah was

   1. A
      Le 38,250
   2. B
      Le 36,450
      Correct
   3. C
      Le 37,350
   4. D
      Le 40,500
   Show answerHide answer

   Answer: B

   List price: Le 50,000. Less 3% trade discount (Le 1,500) = Le 48,500 invoice price. Less returns of Le 8,000 = Le 40,500 balance owed. Less 10% cash discount (Le 4,050) = Le 36,450 cash paid.

5. 5.

   The cost incurred on goods purchased for production which can be traced to a particular unit is classified as

   1. A
      Fixed cost
   2. B
      Direct cost
      Correct
   3. C
      Indirect cost
   4. D
      Overhead cost
   Show answerHide answer

   Answer: B

   A direct cost is one that can be specifically identified with and traced to a particular unit of production. Raw materials and direct labour are typical examples. Indirect costs (overheads) cannot be traced to individual units and must be apportioned.

6. 6.

   The double entry for interest on drawings by a partner is: debit

   1. A
      Partner's drawings account; credit profit and loss appropriation account
   2. B
      Partner's capital account; credit profit and loss appropriation account
   3. C
      Profit and loss appropriation account; credit partner's drawings account
   4. D
      Partner's current account; credit profit and loss appropriation account
      Correct
   Show answerHide answer

   Answer: D

   Interest on drawings is a charge against the partner who made the drawings. It is debited to the partner's current account (reducing their balance) and credited to the Profit and Loss Appropriation Account, thereby increasing the total profit available for distribution to all partners.

7. 7.

   The accounting equation of a business shows the

   1. A
      Cash flow position of the business
   2. B
      Relationship between assets, liabilities and capital
      Correct
   3. C
      Profit made by the business during the year
   4. D
      Market value of the business
   Show answerHide answer

   Answer: B

   The accounting equation (Assets = Capital + Liabilities) expresses the fundamental relationship between what a business owns (assets), what it owes to third parties (liabilities) and the owner's stake (capital). It underpins double-entry bookkeeping and must always balance.

8. 8.

   An office equipment bought for use was found to be defective and returned to the supplier. The subsidiary book to record this transaction is

   1. A
      Purchases journal
   2. B
      Sales journal
   3. C
      Returns inwards journal
   4. D
      Returns outwards journal
      Correct
   Show answerHide answer

   Answer: D

   When goods or assets previously purchased are returned to a supplier, the transaction is recorded in the returns outwards journal (purchases returns book). This applies whether the items returned are trading goods or fixed assets bought on credit.

9. 9.

   Kwamenah bought goods worth Le 50,000 from Doe and Sons Limited on the following terms: 3% trade discount: 10% cash discount. Kwamenah returned defective goods worth Le 8,000 the next day and made payment for the
   remaining goods on the due date.

   Kwamenah would record the 10% discount in the

   1. A
      Returns outwards journal
   2. B
      Purchases journal
   3. C
      Cash book (discount received column)
      Correct
   4. D
      Sales journal
   Show answerHide answer

   Answer: C

   Cash (settlement) discounts received by a buyer for prompt payment are recorded in the discount received column of the cash book. Unlike trade discounts, cash discounts are formally entered in the books because they represent actual income or expense to the parties involved.

10. 10.

    A credit purchase of N200 from Osae was posted to the account of Osei. This is an error of

    1. A
       Error of principle
    2. B
       Error of commission
       Correct
    3. C
       Error of omission
    4. D
       Compensating error
    Show answerHide answer

    Answer: B

    An error of commission occurs when a transaction is recorded in the correct type of account but in the wrong person's account. Here, the purchase was correctly posted to the purchases ledger (creditor's account) but to Osei instead of Osae — a correct class, wrong individual.

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 41 questions we hold from the 2020 paper, on a timed CBT screen

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