WAEC Accounting Past Questions & Answers - Page 86

The going concern concept of accounting implies that the business entity will continue its operations in the future and will not liquidate or be forced to discontinue operations due to any reason.

In accounting, the concept of materiality allows you to violate another accounting principle if the amount is so small that the reader of the financial statements will not be misled. This means that, an accounting standard can be ignored if the net impact of doing so has such a small impact on the financial statements that a reader of the financial statements would not be misled.

Outstanding Subscription (subscription owing)  It is that amount of Subscription which has been due from Previous year(s) and still remains unpaid. Therefore, It is deducted while ascertaining Subscription received during the Current Year and on the Other hand, it is shown on the Assets side of Opening Balance Sheet.

Accounting records include records of assets and liabilities, monetary transactions, ledgers, journals and any supporting documents such as checks and invoices. The firm quality of labour force isnt included in an acounting record.

When merchandise (goods) purchased for cash are returned to supplier, we need to record two journal entries. In first entry we debit accounts receivable account and credit purchases returns and allowances account. This entry is made to recognize the return of merchandise. In second entry we debit cash account and credit accounts receivable account. This entry is made when a refund is received from supplier for merchandise returned to him