![2024 WAEC F/Accounting (Essay & OBJ) Answers [21st May]](https://4.bp.blogspot.com/-T024q_medCM/WnP5kDhgOJI/AAAAAAAAAio/eU-2YkbTJWMs3FuqR_2ZRBp928Xor7-EQCPcBGAYYCw/s1600/WAEC%2BLOGO.png "2024 WAEC F/Accounting (Essay & OBJ) Answers [21st May]")
Tuesday, 21st May 2024
Financial Accounting 2 (Essay) 9:30am – 12:00pm
Financial Accounting 1 (Objective) 12:00pm – 1:00pm
2024 WAEC FINANCIAL ACCOUNTING OBJECTIVE ANSWERS
1-10: CDBACACBBC11-20: CDDBDBDACB
21-30: AADCCBBBBB
31-40: ACBBDDADAA
41-50: CCDABDBBCD
2024 WAEC FINANCIAL ACCOUNTING ESSAY ANSWERS:
(1a)
(i) Purchase of office equipment on credit: General Journal
(ii) Credit purchases: Purchases Day Book
(iii) Bank charges: Cash Book
(iv) Goods returned by a customer: Returns Inwards Book
(1b)
(i) Purchases Journal: The total of all credit purchases is transferred from the purchases journal.
(ii) Cash payments: Details of payments made to suppliers are recorded in the cash book.
(iii) Returns outwards: This journal records goods returned to suppliers.
(iv) Discount received: Discounts received from suppliers are recorded in the cash book along with payment details.
(v) Petty cash payments: Small payments made through petty cash are recorded in this book.
(1c)
(i)
Sales Ledger: The sales ledger contains individual accounts for each
customer. It tracks all sales made on credit, payments received from
customers, and any returns or allowances. This ledger helps in
monitoring outstanding receivables and managing customer accounts.
(ii)
Purchases Ledger: The purchases ledger includes individual accounts for
each supplier. It records all credit purchases from suppliers, payments
made to suppliers, and returns outwards. This ledger assists in
managing outstanding payables and supplier accounts.
(iii)
General Ledger: The general ledger is the central repository of all
financial transactions in a business. It contains all the accounts
necessary to prepare financial statements, including assets,
liabilities, equity, revenues, and expenses. Each transaction recorded
in the books of original entry is posted to the relevant accounts in the
general ledger. This ledger provides a comprehensive overview of the
company's financial position and performance.
(2a)
(PICK ANY SIX)
(i) Accrued Expenses
(ii) Prepaid Expenses
(iii) Accrued Income
(iv) Unearned Income (Deferred Income)
(v) Depreciation
(vi) Bad Debts
(vii) Provision for Doubtful Debts
(viii) Inventory Adjustments
(ix) Amortization
(2b)
(PICK ANY THREE)
(i)
Capital Expenditure is incurred to acquire or improve long-term assets,
such as property, plant, and equipment whereas Revenue Expenditure is
Incurred for the day-to-day running of the business and to maintain the
existing assets.
(ii) Capital Expenditure provides benefits over a
long period, usually more than one accounting period while Revenue
Expenditure provides benefits within the current accounting period.
(iii)
Capital Expenditure is recorded as an asset in the balance sheet and
depreciated over its useful life while Revenue Expenditure is Charged
directly to the income statement as an expense in the period it is
incurred.
(iv) Capital Expenditure affects both the balance sheet
(increase in assets) and the income statement (depreciation expense)
while Revenue Expenditure directly affects the income statement by
reducing profit for the period.
(v) Capital Expenditure costs are
capitalized, meaning they are added to the value of the asset and
amortized over time while Revenue Expenditure costs are expensed in the
period they are incurred and do not appear on the balance sheet.
(3a)
Ose
operate with Single Entry System of bookeeping. This system is
typically used by small businesses or sole proprietors who do not keep
proper books of account. In the single entry system, only one side of
each transaction (either debit or credit) is recorded, which contrasts
with the double entry system where every transaction affects at least
two accounts.
(3b)
ADVANTAGES:
(PICK ANY THREE)
(i) The
single entry system is easy to understand and use, making it accessible
to those without formal accounting knowledge. It involves fewer records
and less complex procedures.
(ii) Implementing and maintaining a
single entry system is inexpensive. It does not require advanced
accounting software or professional accountants, which can be costly for
small businesses.
(iii) This system takes less time to manage
compared to the double entry system. Business owners can spend more time
focusing on their core operations rather than on detailed bookkeeping.
(iv)
The single entry system requires minimal paperwork and fewer records.
This reduces the administrative burden on the business owner.
(v)
The system offers flexibility as it does not follow strict accounting
rules and procedures. This can be advantageous for small businesses with
straightforward transactions.
DISADVANTAGES:
(PICK ANY THREE)
(i)
The single entry system can lead to incomplete and inaccurate financial
records. Since it does not track both sides of transactions, there is a
higher risk of errors and omissions
(ii) Due to the lack of
checks and balances inherent in the double entry system, the single
entry system is more susceptible to fraud and errors. It is difficult to
detect discrepancies and irregularities.
(iii) The limited
financial information provided by the single entry system makes it
difficult for business owners to make informed decisions. Critical
financial metrics and insights are often missing.
(iv) Financial
institutions typically require detailed and accurate financial records
when assessing loan applications. The single entry system’s lack of
comprehensive financial data can make it difficult for businesses to
obtain financing or attract investors.
(4a)
(PICK ANY THREE)
(i)
Equity Shareholders are owners of the company and hold a share of the
company's residual assets. While Debenture Shareholders are creditors to
the company and do not have ownership rights; they hold a company's
debt instruments.
(ii) Equity Shareholders generally have voting
rights, allowing them to influence corporate decisions and elect the
board of directors. While Debenture Shareholders do not have voting
rights and cannot participate in corporate governance
(iii) Equity Shareholders earn dividends, which are not guaranteed and depend on the company's profits. While
Debenture shares earn fixed interest payments, which are guaranteed and must be paid regardless of the company's profitability.
(iv)
Equity Shareholders have the last claim on the company's assets in the
event of liquidation, after all debts and other liabilities have been
settled. Whole Debenture Shareholders have a higher claim on the
company's assets than equity shareholders and are paid before them in
case of liquidation.
(v) Equity Shareholders bear higher risk due
to variability in dividends and no guaranteed return, but they have the
potential for higher rewards through capital gains. While Debenture
Shareholders bear lower risk as they receive fixed interest payments and
have a guaranteed return, but they do not benefit from capital gains as
equity shareholders do.
(4bi)
Cumulative Preference Shares:
Cumulative preference shares accumulate unpaid dividends. If a company
is unable to pay dividends in a given year, the unpaid dividends are
carried forward to future years. These must be paid out before any
dividends can be given to equity shareholders in subsequent years.
(4bii)
Redeemable
Preference Shares: Redeemable preference shares can be bought back
(redeemed) by the issuing company after a certain period or on a
specified date at a predetermined price. This provides the company with
flexibility in managing its capital structure and allows shareholders to
know when they can expect their capital to be returned.
(4biii)
Participating
Preference Shares: Participating preference shares entitle shareholders
to a fixed dividend and an additional dividend based on certain
conditions, usually related to the company's profitability. They also
may receive a portion of the residual assets upon liquidation after all
debts and fixed dividends have been paid.This provides an opportunity
for higher returns in profitable years.
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4 Comments
Dikko Chinedu
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