Wassce (Waec) 2018 Financial Accounting Question And Answers

FINANCIAL ACCOUNTING QUESTIONS:

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2018 WAEC MAY/JUNE FINANCIAL ACCOUNTING

(1a)

(1)
It can result in a business exhausting the budget, leading to spending more than
what is coming in.

(2)
Businesses may need to file for bankruptcy or shut their doors if they fail to keep adequate records from the
beginning.

(3)
It can result in problems with suppliers, payroll, utilities, and other vital components to a running successful business.

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4a
- employees
- banks
- government
- creditors
- analyst
- owners

2b.)

I) Merchandise stock

It is the inventory of trading goods held by the trader.

II). Manufacturing Stock

It is the inventory held for manufacturing and selling of goods. Based on the value addition or stage of completion, the manufacturing inventories are further classified into 3 types of inventory – Raw Material, Work-In-Progress, and Finished Goods

III)Anticipatory Stock

Based on the past experiences, a businessman is able to foresee the future trends of the market and takes certain decisions based on that. Expecting a price rise, a spurt in demand etc some businessman invests money in stocking those goods. Such kind of inventory is known as anticipatory stock. It is normally the raw materials or finished goods and this strategy is executed by traders.

1b)
- Relevance means an account information to make a difference in decision making
- Comparability means an account information can be used to compare different entities
- Consistency: information is consistently presented from year to year
- Reliability means an account information is verifiable, factual, and neutral.

- Accounting information is historical in nature

- there is no information as to usefulness, size or quantity because accounting is expressed in monetary terms

3A )

Where a big business with diverse trading activities is conducted under the same roof the same is usually divided into several departments and each department deals with a particular kind of goods or service. For example, a textile merchant may trade in cotton, woolen and jute fabrics. The overall performance for this type of business depends, however, on departmental efficiency.

3B )
i) Compare the results among the different departments together with the previous results thereof,

(ii) Formulate policy in order to extend or to develop the enterprise in the proper line; and