WAEC Accounting Past Questions & Answers - Page 340

1,696.

The concept that states that a business should not lay claim to any profits before it is earned with reasonable certainty is

A.

Constitency concept

B.

Prudence concept

C.

Accrual concept

D.

Going corncern concept

Correct answer is C

Accrual concept is the most fundamental principle of accounting which requires recording revenues when they are earned and not when they are received in cash, and recording expenses when they are incurred and not when they are paid.

1,697.

In a not-for-profit making organization, when the total income is less than the total expenditure, the difference is a

A.

Surplus

B.

Shortfall

C.

Loss

D.

Deficit

Correct answer is D

A deficit occurs for a nonprofit organization whenever its expenses exceed its revenue. (income is less than expenditure) . This is also true of businesses and government agencies. Deficits can be difficult for nonprofit organizations to overcome because they are heavily dependent upon the generosity of donors to stay afloat.

1,698.

A petty cash account has an imprest of D28,000. The account has a debit balance of D5,000. How much cash is needed to restore the imprest?

A.

D33,000

B.

D28,000

C.

D23,000

D.

D5,000

Correct answer is C

  • The petty cash monthly imprest= 28,000
  • Debit balance (amount left in the imprest) = 5,000
  • 28,000 - 5,000 = 23,000
  • we need 23,000 to reimburse the imprest

 

1,699.

When an asset is sold, the entries for the accumulated depreciation are; debit

A.

Assets disposal account; credit provision for depreciation account

B.

Provision for depreciation account; credit asset disposal account

C.

Fixed asset account; credit asset disposal account

D.

Asset disposal account; credit fixed asset account

Correct answer is B

Debit cash for the amount received, debit all accumulated depreciation, debit the loss on sale of asset account, and credit the fixed asset.

1,700.

The sum of direct cost in a manufacturing account is

A.

Production cost

B.

Prime cost

C.

Total cost

D.

Finance cost

Correct answer is B

Prime cost is the direct cost of a commodity in terms of the materials and labour involved in its production, excluding fixed costs.