Waec 2017 Financial Accounting Answers Essay/Obj Now posted

Wednesday, 19thApril, 2017
Financial Accounting 2 (Essay) 09.30am – 12.00am
Financial Accounting 1 (Objective) 12.00am –1.00pm


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ACCOUNT OBJ
1-10: ABBCCBACCA
11-20 CCACCACCAB
21-30: CACBCCABBD
31-40: BCCDADDBBD
41-50: DBABAABBDC

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THEORY ANSWERS........


1a)A source document is the original record containing the details to substantiate a transaction entered in an accounting system.


1b)
i) Invoice
ii) credit note
iii) debit note
iv) payment voucher
v) petty cash voucher
vi)bank statement
1c)
i)to find out the unpresented cheques which have been already issued to the creditors.

ii)to find out what are the reasons behind why either bank statement or cash book shows the different amounts apart from the expected balances.


2a. A trial balance is a bookkeeping or accounting report that lists the balances in each of an organization’s general ledger accounts.


2b.
- to detect any errors that has occurred in the double entry accounting system

– it helps in the preparation of financial statements

2c
1. Errors of Principle:
An error of principle is an error which violates the fundamentals of book-keeping. For instance, purchase of furniture is debited to Purchase Account, instead of Furniture Account; Wages paid for the erection of plant is debited to Wages Account, instead of Plant Account; the amount spent on extension of building is debited to Repairs Account instead of Building Account etc. These types of errors do not affect the total debits and total credits but affect the principle of book-keeping.

2. Errors of Omission:
If a transaction is completely omitted, there will be no effect on the Trial Balance. When a transaction goes completely unrecorded in both aspects or a transaction after being recorded in the books of primary entry is not at all posted in the ledger, the error is an error of omission. For instance, if a credit purchase is omitted to be recorded in the Purchase Day Book, then it will be omitted to be posted both in the Purchase Account and the Supplier’s Account. This error will not, however, result in the disagreement of Trial Balance.

3. Posting to Wrong Account:
Posting an item to wrong account, but on the correct side. For instance, if a purchase of Rs 200 from Ramu has been credited to Raman, instead of Ramu and this error will not affect the agreement of Trial Balance. Thus, Trial Balance will not detect such an error.

4. Error of Amounts in Original Book:
If an invoice for Rs 632 is entered in Sales Book as Rs 623, the Trial Balance will come out correctly, since the debit and credit have been recorded as Rs 623. The arithmetical accuracy is there, but in fact there is an error.




3ai)
Accumulated fund:This is the funds that correspond to the capital of the partnership or sole trader and it will be calculated using the statement of affairs


3aii)
Subscription in arrears:This is the sum of money due for members but remained unpaid.It is treated as debtors in the balance sheet


3aiii)
Reciepts and payments:this is the accounts that shows the summary of a cash book over a particular period of time


3aiv)
Income and expenditure account:This is type of account being prepared based on the same principle as the profit and loss accounts.It is described as the equivalent of profit and loss account


3av)
Entrance fees:This is the money paid on application for membership of an association or club.It is normally treated as income in income and expenditure account


3b)
A share is defined as that portion of the joint stock companies capital owned by a share holder while debentures are documents in form of borrowing (eg bond issued under the seal of company in respect of money lent to it) on which the company agree to pay a certain fixed rate of interest


(4a) Depreciation is the measure of the wearing out, consumption or other loss of value of a fixed asset whether arising from use, effluxion of time or obsolescence through technology and market changes


(4b)
I. Physical deterioration
ii. Obsolescence
iii. The time factor
iv. Economic factor
v. Inadequacy



Reasons to prepare BRS 1)To detect items not entered and errors in the cash book. To ensure that the cash book entries are complete.

2) Items missing from the cash book will not have been recorded in other ledger accounts and the business records will be unreliable

3) It is not a legally binding practice; rather, it is a generally accepted convention based on customs and designed to help accountants overcome practical problems that arise out of the preparation of financial statements.

(9)

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