2021 WAEC FINANCIAL ACCOUNTING ANSWERS

2021-WAEC-FINANCIAL-ACCOUNTING-ANSWERS⇓

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FINANCIAL-ACCOUNTING-THEORY

SECTION A; ANSWER 2 QUESTION ONLY (PICK ONLY 2 ANSWERS)

(1a)
Accounting concept refers to the basic assumptions and rules and principles which work as the basis of recording of business transactions and preparing accounts.

(1bi)
Business entity: This provides that the financial activities of a firm be kept separate from the personal affairs of its owner.

(1bii)
Accrual: This concept states that revenues and costs are recognized as they are earned or incurred, not as when money is received or paid.

(1biii)
Going concern:This assumes that a business will continue to operate intothe foreseeable future, unless something contrary happens.

(1biv)
Consistency: The concept of consistency means that accounting methods once adopted must be applied consistently in future

(1bv)
Periodicity: The concept provides that preparation and reporting of accounting information should be done at regular intervals to allow users to have access to information at all times, since decisions may be taken at any time.

(1bvi)
Historical cost: this concept states that the value of an asset is determined by the cost of its acquisition and not by the value of returns which are expected to be earned.

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(3ai)
Entrance Fees or Admission Fees is the amount that a person pays at the time of becoming a member of a Not-for-Profit Organization. It is a revenue receipt. Therefore, we account it as an income and credit it to Income and Expenditure Account.

(3aii)
A subscription is a signed agreement between a supplier and customer that the customer will receive and provide payment for regular products or services, usually for a one-year period.

(3b)
(Pick Any five)
(i) No Opening Balance:- Opening balance is not require to prepare income and expenditure account.

(ii) Accrual Basis:- Income and expenditure account is maintained on accrual basis.

(iii) Based On Receipt And Payment Account:- Income and expenditure account is prepared on the basis of receipt and payment account at the end of the accounting year.

(iv) Non-cash Items:- This account records non-cash items also
(v) Debit And Credit Rule:- Expenses and losses are debited and incomes are credited as it is a nominal account.

(vi) No Capital Transactions:- Only revenue items are included in income and expenditure account. So, capital items are excluded while preparing this account.

(vii) Only Current Year’s Transactions:- Income and expenditure account includes only current periods transactions.

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(4a)
bank reconciliation statement is a summary of banking and business activity that reconciles an entity’s bank account with its financial records. In other words the statement outlines the deposits, withdrawals, and other activities affecting a bank account for a specific period.

(4bi)
bank charges covers all charges and fees made by a bank to their customers. In common parlance, the term often relates to charges in respect of personal current accounts or checking account.

(4bii)
standing order is an instruction a bank account holder gives to their bank to pay a set amount at regular intervals to another’s account. The instruction is sometimes known as a banker’s order.

(4biii)
Credit transfer” means a payment transaction by which a credit institution transfers funds to a payee’s account on the basis of a payer’s order, and the payer and the payee can be the same person.

(4biv)
Dishonoured cheques are cheques that a bank on which is drawn declines to pay. There are a number of reasons why a bank would refuse to honour a cheque, with non-sufficient funds being the most common one, indicating that there are insufficient cleared funds in the account on which the cheque was drawn.

(4bv)
unpresented cheque simply means that a cheque has been written and accounted for, but it has not yet been paid out by the bank from which the money is being drawn. Unpresented cheques are also referred to as outstanding cheques because the funds in question are, as the name suggests, outstanding.

(4bvi)
uncredited cheques represent money that is available to the company but has not yet been recognised by the bank. This comes in the form of cheques paid in by customers and clients.

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SECTION B; ANSWER 3 QUESTION ONLY (PICK ONLY 3 ANSWERS)

Note; pls don’t mind the numbering in the page use the one we tag on top of it.
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(9)

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COMPLETED

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