VERIFIED WAEC 2016/2017 FINANCIAL ACCOUNTING ESSAY AND OBJ ANSWERS

ACCOUNTING OBJ:
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11-20 CCBCBBDBBB
21-30 CAADADBCBA
31-40 ABDCDACBBB
41-50 BBDBADCCCC
FINANCIAL ACCOUNTING THEORY FOR CANDIDATES IN NIGERIA
(1a)
General journal is the accounting version of our
personal journals. It doesn't record everything that
happens to the business, of course, but it does record
every financial transaction that takes place (sometimes
alone, sometimes as a group of similar transactions). Like
our personal journal entries, it notes the date, the
accounts involved, and the amounts of money, as well as
providing a brief description of what happened
(1b)
i. Recording of disposal of fixed asset
ii. For recording opening entries
iii. Transfer of items between accounts
iv. Correction of errors
v. Double entry transaction
vi. For recording closing balance of entries
(2ai)
Discount Allowed
Bills receivable
Bad debts
Return inwards
(2aii)
Discount Received
Bills Payable
Cash to suppliers
Return outwards
(2b)
1. Error of original entry
2. Error of omission
3. Error of commission
4. Error of principle
5. Compensating errors
6. Complete reversal of entry
7.
(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
(4c)
i. Straight line: This allows an equal amount to be charged as depreciation for each year of expected use of the asset. The basic formula is
Cost = Estimated residual value/number of years of expected use
Advantage Of Straight Line:
i. it is simple to calculate
ii. It is time oriented
Disadvantage Of Straight Line:
i. Assumption of equal or constant revenue per year is unrealistic
ii. Might lead to a misleading picture of the financial statement
Reducing balance: Under this method, the depreciation charged per annum is determined by applying a fixed rate of depreciation on the net book value of the asset at the beginning of each year.
Advantage Of Reducing Balance:
It gives a fairly even charge against revenue beach year.
ii. Depreciation is more scientifically provided for
Disadvantage of reducing balance:
i. Difficulty in calculating the rate of depreciation
(4ciii)
Revaluation: By this method, the asset is revalue each year, any difference will be charged as depreciation to the profit and loss account. The value of the asset at the beginning and end of the year must be known..
The calculations is as follows
Opening stock **
Add: purchase. **
---
Less: closing stock. **
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