WAEC Financial Accounting Obj And Essay/Theory Solution Questions and Answer – MAY/JUNE 2018 Expo Runz.
FOR THOSE WHO DON’T KNOW HOW TO TABULATE.
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Statement Of affairs as at 1|1|06
Capital (Opening) N30,000
Land And Building N15,000
Motor Vechicle N6,000
Trading Profit and loss account for the year ended 31st december 2016
opening stock N4000
Closing Stock (2,000)
Cost of goods sold 13500
gross profit cld 17500
rent and rates N4000
dep on motor vechicle N2000
net profit N1500
gross profit b|d N17,500
Balance Sheet as at 31|12|2006
add net profit N1500
insurance Owning N6000
Land and Building N15,000
motor vehicle N4000
Obihan trading profit and loss account
SALES = 1,200,000
Less return inward =
Less cost of sales
Opening stock = 3000,000
Add purchase 1,050,000
Less return outward = 18,600
Cost of goods available. =1,331,400
Less closing stock=360,000
Cost of goods sold=971,400
LESS OPERATIVE EXPENSIVE
Rates (18,000 +1,500) = 16,500
Rates ( 18,000 + 660) = 3,660
Salaries (90,000 + 15,000) = 105,000
Bad Debits = 600
Insurance = 93,000
Depreciation: Furniture 9,000
Machineries = 18,000
Provision for bad debit = 540
NET LOSS 246,300
Cash book Adjustment
Bal bld N48,500
interest on investment N2500
credit transfer N3000
Bank Charges N1000
Dishonured cheques N2000
bal cld N51,000
Total Bal bld N51,000
Bank Reconcilation statement at 31/12/2016
balance as per adjusted cash book N N51,000
add unpresented cheques 8850
add back wrong credit 3500
less uncredited cheques (8450)
balance as per bank statement N54,900
i)It can result in a business exhausting the budget, leading to spending more than
what is coming in.
ii)Businesses may need to file for bankruptcy or shut their doors if they fail to keep adequate records from the beginning.
iii)It can result in problems with suppliers, payroll, utilities, and other vital components to a running successful business.
i)Relevance means an account information to make a difference in decision making
ii)Comparability means an account information can be used to compare different entities
iii)Consistency: information is consistently presented from year to year
iv)Reliability means an account information is verifiable, factual, and neutral
i)Accounting is only one source of information and primarily provides information based on financial terms: Although this information is vital, decisions cannot be based solely on a
monetary basis. Various decisions depend upon a diverse range of issues being considered.
ii)The historical perspective of financial accounting: In order to obtain a recent estimate of an entity’s financial performance, the corporate managers carefully scrutinize
financial accounting information. In retrospect, this information is based on past performance.
Direct materials consist of all of the materials that become an integral part of the finished product. Direct materials should include the actual cost of the materials, as well as freight in, import duties, purchasing costs, receiving costs, storage costs and other directly attributable costs of acquiring the materials.
Example- Orange in fanta making
Direct labor consists of all of the personnel costs required to manufacture the finished product. Direct labor should include wages, payroll taxes, and benefits associated with personnel who are integral to manufacturing the finished product.
Example- Wage of machine operator
Factory overhead consists of all of the other costs required to manufacture the finished product that do not fit into the direct material or direct labor elements. They consist mainly of indirect material, indirect labor, depreciation, utilities, rent, repairs and maintenance and insurance.
Example- Indirect wages.
These are the materials or goods purchased by the manufacturer. Manufacturing process is applied on the raw material to produce desired finished goods.
ii)WORK-IN-PROGRESS (WIP) These are the partly processed raw materials lying on the
These are the final products after manufacturing process
on raw materials. They are sold in the market.There are two kinds of manufacturing industries.