WAEC Financial Accounting 2024 past questions

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

Ten questions from the 2024 WAEC Financial Accounting paper, with answers and explanations. We hold 50 questions from this paper, and the Skolra app has all of them.

WAEC Financial Accounting 2024 questions and answers

1. 1.

   The class of shares which are available only to the promoters of a company are

   1. A
      Modified cash basis
   2. B
      Hybrid basis
   3. C
      Cash basis accounting
   4. D
      Accrual basis accounting
      Correct
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   Answer: D

   Accrual basis accounting recognizes revenue when earned (not when cash is received) and expenses when incurred (not when paid). This matches revenues with related expenses in the correct period. Cash basis recognizes transactions only when cash flows occur. IFRS and GAAP require accrual accounting for fair financial reporting. Modified/hybrid bases blend both. Accrual accounting presents the true economic position regardless of cash timing.
2. 2.

   Errors in the trial balance are corrected using the

   1. A
      Error of principle book
   2. B
      Suspense account
   3. C
      Correction account
   4. D
      Journal
      Correct
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   Answer: D

   The journal is used to record and correct errors found in the trial balance. Each correction entry in the journal explains the error and how it's being corrected. A suspense account temporarily holds uncertain amounts pending investigation. Errors are formally corrected through journal entries which update the affected ledger accounts. The journal provides the audit trail documenting how errors were discovered and corrected.
3. 3.

   The debit side of a trial balance total is GH¢ 2,000 more than the credit side. Which of the following errors would account for the difference?

   1. A
      Posting ₦2,000 from the sales journal to the debit of the sales account
   2. B
      A purchase invoice of ₦2,000 recorded as ₦4,000
      Correct
   3. C
      A credit sales of ₦2,000 recorded as a purchase
   4. D
      An omission of a transaction from both books
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   Answer: B

   When a transaction is recorded with double the correct amount in both debit and credit, the trial balance balances only if both sides are equally overstated. A purchase invoice recorded as ₦4,000 instead of ₦2,000 causes a ₦2,000 imbalance on one side, making the debit exceed credit by ₦2,000. This type of error, where a transaction is completely recorded but at the wrong amount, creates a trial balance discrepancy equal to the difference.
4. 4.

   In manufacturing account, wages of machine operators are classified as

   1. A
      Posting to accounts
   2. B
      Recording debits and credits
   3. C
      Verifying transaction equality
      Correct
   4. D
      Summarizing account balances
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   Answer: C

   A trial balance's purpose is to verify the fundamental principle of double-entry bookkeeping: debits equal credits. It lists all ledger accounts with their balances (debits in one column, credits in another). If totals match, the mechanical accuracy of recording and posting is verified. This doesn't prove accounts are correct (errors in equal amounts balance) or financial statements are accurate. It simply verifies the equality of debit and credit entries.
5. 5.

   Distribution of dividends to shareholders are made from profit

   1. A
      Share capital account
   2. B
      Dividends account
   3. C
      Statement of changes in equity
   4. D
      Retained earnings
      Correct
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   Answer: D

   Dividends are distributions of profits to shareholders and represent a reduction in retained earnings. When dividends are declared and paid, they come from the company's accumulated profits (retained earnings). The retained earnings account tracks cumulative profits minus distributions. Share capital remains unchanged by dividend payments. Dividends reduce the retained profits available for business reinvestment and shareholder claims.
6. 6.

   Liquid assets refer to

   1. A
      Assets that can be quickly converted to cash
      Correct
   2. B
      Fixed assets
   3. C
      Intangible assets
   4. D
      All current assets
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   Answer: A

   Liquid assets are those readily convertible to cash without significant value loss. They include cash, marketable securities, and accounts receivable. Not all current assets are liquid (inventory requires sale time), and fixed assets convert slowly. Intangible assets like goodwill and patents are difficult to convert. Liquid assets represent the most readily available resources to meet short-term obligations.
7. 7.

   An item recorded in the trial balance is

   1. A
      Conservatism principle
   2. B
      Business entity concept
   3. C
      Materiality principle
   4. D
      Going concern concept
      Correct
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   Answer: D

   The going concern concept assumes the business will continue operating indefinitely, justifying asset valuation at cost (not liquidation values) and the distinction between current and non-current classifications. If liquidation were imminent, assets would be valued at selling prices. This concept underlies deferral of costs and matching principles. Going concern is fundamental to accrual accounting and standard financial statement presentation.
8. 8.

   The objective of preparing a departmental account is to

   1. A
      Assets equal liabilities plus equity
   2. B
      Income equals expenses
   3. C
      Debit side totals equal credit side totals
      Correct
   4. D
      Cash inflows equal cash outflows
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   Answer: C

   The trial balance fundamental purpose is to verify the double-entry principle: every debit has a matching credit. If the trial balance balances, debits equal credits, confirming transactions were recorded in pairs. This doesn't verify accuracy (errors can exist in balanced trial balances) but confirms the mechanical accuracy of the bookkeeping process. A balanced trial balance is prerequisite to preparing financial statements.
9. 9.

   According lo the entity concept, ownership is

   1. A
      Recognition of profit
   2. B
      Increase in liabilities
      Correct
   3. C
      Owner's investment
   4. D
      Decrease in assets
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   Answer: B

   Revenue recognition increases both assets (through cash or receivables) and owner's equity simultaneously. For every revenue transaction, there's a debit (asset increase or expense decrease) and credit (equity increase or liability decrease). Revenue represents the inflow of economic benefits from selling goods/services. It increases the owner's claim on assets. Liabilities typically decrease when revenue is recognized, not increase, unless deposits are included.
10. 10.

    A bank is interested in accounting information of a client for the purpose of

    1. A
       Prime cost
    2. B
       Production overheads
       Correct
    3. C
       Fixed overheads
    4. D
       Direct wages
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    Answer: B

    Machine operators' wages are wages of production workers who supervise or operate production machinery. These are part of manufacturing/factory overheads (indirect labor) since they're not directly attributable to specific products. Direct wages go to production workers directly making goods. Prime cost includes only direct materials and direct labor. Machine operators contribute to production environment but not directly to output.

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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