![2024 NECO Financial Accounting (OBJ & Essay) Answers [9th July]](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9f_kgZHkpwe3ZGRMKuPnGA-VD_OOBrZ8lPvbX2Ck7LqE2bxJno-zybxRraBaMGmR8NR5aUR9yODXkyg5Pk9H4I4xkxcu0GZSMrd5rmqt4Rgu31igdvKf2KMReKipXCIFKpgGzlPwI3rw/s1600/NECO.jpg "2024 NECO Financial Accounting (OBJ & Essay) Answers [9th July]")
A. 2024 NECO FINANCIAL ACCOUNTING (OBJECTIVES) ANSWERS:
11-20: DEBCCBECEA
21-30: EBDBDDCCEE
31-40: DADCCDEDBD
41-50: EDEBDDCAAE
51-60: CECCABCDBE
B. 2024 NECO FINANCIAL ACCOUNTING (ESSAY) ANSWERS:
(1a)
(PICK ANY THREE)
(i) Decreased Sales Volume: A drop in the number of units sold can lead to lower gross revenue, thereby reducing gross profit.
(ii)
Increased Cost of Goods Sold: Rising costs of raw materials, labor, or
manufacturing can increase COGS, reducing the gross profit margin.
(iii) Price Reduction: Lowering the selling price of goods without a corresponding decrease in costs can diminish gross profit.
(iv)
Poor Inventory Management: Overstocking or understocking can lead to
increased storage costs, wastage, or lost sales, negatively impacting
gross profit.
(v) Market Competition: Increased competition can force
a business to lower prices or incur higher marketing expenses, reducing
gross profit.
(1b)
(PICK ANY FIVE)
(i) Initial Cost
(ii) Useful Life
(iii) Residual Value
(iv) Depreciation Method
(v) Asset Usage
(vi) Repairs and Maintenance Costs
(1c)
(PICK ANY THREE)
(i) Wear and Tear
(ii) Obsolescence
(iii) Natural Factors
(iv) Accidents and Damage
(v) Legal and Regulatory Changes
(2i)
Proforma Invoice:
A
proforma invoice is a preliminary invoice sent to the buyer before the
shipment of goods, indicating the weight, value, and other details of
the goods to be shipped. It's used to obtain import/export licenses,
open letters of credit, and for customs purposes. Unlike a standard
invoice, it is not a request for payment but rather a statement of
commitment that helps in planning and budgeting for the buye
(2ii)
Goodwill:
Goodwill
is an intangible asset that arises when a business is purchased for
more than the fair value of its identifiable net assets. It represents
the value of a company's brand, customer relationships, employee
relations, and other factors that contribute to its earnings potential
beyond its tangible assets. Goodwill is recorded on the balance sheet
and is subject to impairment testing but is not amortized.
(2iii)
Consignee:
A
Consignee is the person or entity to whom goods are shipped and
delivered. In the context of consignment, the consignee is responsible
for selling the goods on behalf of the consignor (the owner of the
goods). The consignee typically does not own the goods but holds them in
trust until they are sold, at which point the proceeds are shared as
agreed.
(2iv)
Preference Share:
A Preference Share is a
type of equity security that entitles the holder to a fixed dividend
before any dividends are paid to common shareholders. Preference shares
usually do not carry voting rights, but they have a higher claim on
assets and earnings than common shares. In the event of liquidation,
preference shareholders are paid out before common shareholders.
(2v)
A
Three Column Cash Book is an accounting record that tracks all cash and
bank transactions in a business, along with discounts. It has three
main columns for each side (debit and credit): cash, bank, and discount.
This cash book provides a comprehensive view of the business's cash
flows, bank transactions, and any discounts allowed or received, making
it a vital tool for managing liquidity and financial transactions.
(3a)
(PICK ANY FIVE)
(i)
Errors of Omission: When a transaction is completely omitted from the
accounting records. For example, if both the debit and credit entries
for a sale are not recorded, the trial balance will still balance.
(ii)
Errors of Commission: When an entry is made to the wrong account but on
the correct side. For instance, posting a receivable to the wrong
customer account will not affect the trial balance.
(iii) Errors
of Principle: When a transaction violates fundamental accounting
principles. An example is recording a capital expenditure as a revenue
expense. This error affects the financial statements but not the trial
balance.
(iv) Compensating Errors: When two or more errors cancel
each other out. For example, an overstatement in one account might be
offset by an understatement in another.
(v) Errors of Original
Entry: When both the debit and credit sides of a transaction are
incorrectly recorded with the same incorrect amount. For example,
recording a sale of N500 as N50 in both the sales and cash accounts.
(vi)
Errors of Reversal: When the debit and credit entries of a transaction
are reversed. For instance, recording a payment to a creditor by
debiting the creditor’s account and crediting the bank account.
(vii)
Errors of Duplication: When a transaction is recorded more than once.
If both instances of the duplicate entry are equal, the trial balance
will still balance.
(3b)
(PICK ANY FIVE)
(i) Raw Material Costs
(ii) Direct Labor Costs
(iii) Manufacturing Overheads
(iv) Depreciation of Manufacturing Equipment
(v) Indirect Materials
(vi) Indirect Labor
(vii) Work-in-Progress Costs
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