Get latest essay and objective questions and answers for the 2024 WAEC GCE Financial Accounting 2nd Series – Attention all candidates taking the 2024 West African Examinations Council (WAEC) General Certificate of Education (GCE) November/December exam! We are excited to announce that the Financial Accounting Objective and Essay questions and answers for the second series (2nd) are now available right here.
WAEC GCE Financial Accounting Exam Details
Exam: Financial Accounting 2 (Objective and Essay/Theory)
Date: Wednesday, 13th November 2024
Time:
- Financial Accounting 2 (Theory and Practice): 9:30am – 12:00pm.
- Financial Accounting 1 (Objective): 12:00pm – 1:00pm.
Get Early Access to WAEC GCE Financial Accounting 2nd Series Questions and Answers
We’re offering free Financial Accounting Objective and Essay questions and answers for private candidates in the second series. This is a fantastic opportunity to boost your preparation and enhance your chances of success!
WAEC GCE Financial Accounting Objective (OBJ) Answers 2024
F/ACCOUNTING-OBJ
01-10: BCBDACBBBB
11-20: CBCAAACAAA
21-30: ADDCACDDDA
31-40: DDDACCCCAC
41-50: CAABCBABDD
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WAEC GCE Financial Accounting Theory (Essay) Answers 2024
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23th Nov 2024: F/ACCOUNTING-ESSAY ANSWERS
(1a)
(i) Mr. Abu, if appointed as an accountant for the position at XYZ Ltd, would be required to prepare financial statements. These financial statements would provide accounting information to enable management to make informed decisions about the company.
(ii)
(i)Relevance: The information should be relevant to the decision-making process of the users.
(ii)Reliability: The information should be accurate and reliable, meaning it should be based on sound accounting principles and be free from material errors.
(iii)Understandability: The information should be presented in a clear and understandable manner, making it accessible to users with different levels of accounting knowledge.
(iv)Timeliness: The information should be provided in a timely manner to be relevant for decision-making.
(1b) Seven users of the accounting information of the company are:
(i)Management: They use accounting information to make strategic decisions, assess performance, and plan for future activities.
(ii)Investors: They rely on accounting information to evaluate the financial health of the company and make investment decisions.
(iii)Creditors: They use accounting information to assess the company’s ability to repay loans and make credit decisions.
(iv)Employees: They may use accounting information to negotiate salaries, understand the company’s financial stability, and assess job security.
(v)Customers: They may use accounting information to evaluate the financial stability of the company and its ability to fulfill its obligations.
(vi)Regulatory bodies: They use accounting information to ensure compliance with laws and regulations and to assess the company’s financial reporting practices.
(vii)Competitors: They may use accounting information to analyze the financial performance and position of the company in the market
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No (3i)
Accruals Concept:
The accruals (or matching) concept states that income and expenses should be recorded in the period to which they relate, not necessarily when cash is received or paid. This principle ensures that revenues and expenses are matched to the same accounting period, providing a more accurate picture of the company’s performance. For Jasket Ltd, this means that all revenues earned and expenses incurred by 31st December 2022 are reported in the financial statements, even if cash has not yet changed hands.
(3ii)
Going Concern Concept:
The going concern concept assumes that the business will continue its operations into the foreseeable future and does not plan to liquidate or significantly curtail its activities. This affects asset valuation, as assets are valued based on their ongoing use rather than liquidation value. For Jasket Ltd, if it is assumed to be a going concern, assets are reported at cost or amortized cost, assuming they will continue to generate future economic benefits.
(3iii)
Consistency Concept:
The consistency concept mandates that a company should use the same accounting methods and principles across periods unless there is a valid reason to change them. This allows for better comparability of financial statements over time. For Jasket Ltd, if they previously used straight-line depreciation, they should continue to use it unless a change is justified and disclosed, helping stakeholders make meaningful year-to-year comparisons.
(3iv)
Prudence (or Conservatism) Concept:
Prudence requires that assets and income are not overstated, and liabilities and expenses are not understated. This principle dictates that uncertainty should be handled with caution, ensuring losses are recognized when probable, but gains only when realized. For Jasket Ltd, this means reporting potential bad debts or impairments and making provisions for anticipated losses, ensuring the financial statements are not overly optimistic.
(3v)
Materiality Concept:
Materiality states that financial statements should include all information significant enough to influence the decisions of users. Insignificant details can be omitted or aggregated for simplicity, but anything deemed “material” must be presented separately. Jasket Ltd would apply this concept by including significant items that could affect users’ decisions, while grouping minor ones to maintain clarity in the financial statements.
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(4a)
Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It represents the wear and tear, deterioration, or obsolescence of an asset over time. Depreciation is an expense on the income statement and helps in matching the cost of an asset with the revenue it generates during each accounting period.
(4b)
(i) Accurate Financial Reporting: Depreciation allows companies to allocate the cost of an asset over its useful life, ensuring accurate financial statements by matching expenses with revenues.
(ii) Asset Replacement: Regular depreciation charges build up a reserve, helping a business prepare financially to replace assets when they become outdated or non-functional.
(iii) Tax Benefits: Depreciation is a non-cash expense that reduces taxable income, providing tax savings and improving cash flow.
(4c)
(i) Cost of the Asset: The original purchase price, including costs to make the asset operational (e.g., shipping, installation).
(ii) Useful Life: The expected period over which the asset will be productive or useful to the company.
(iii) Salvage (Residual) Value: The estimated value of the asset at the end of its useful life, which is subtracted from the asset cost to determine the depreciable amount.
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Study Materials for 2024 WAEC GCE Financial Accounting
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In this article, I will provide you with all the past Objective (OBJ) and Essay questions, along with sample answers for the WAEC GCE Financial Accounting exam.
Financial Accounting Past Objective Questions (OBJ)
- Which of the following is not a principle of accounting?
- A) Consistency
- B) Prudence
- C) Transparency
- D) Liquidity
Answer: C) Transparency
- What is the primary purpose of financial accounting?
- A) To determine the tax liability
- B) To provide information for internal decision-making
- C) To prepare financial statements for external users
- D) To comply with legal requirements
Answer: C) To prepare financial statements for external users
- Which financial statement summarizes revenues and expenses over a period?
- A) Balance Sheet
- B) Statement of Cash Flows
- C) Income Statement
- D) Statement of Changes in Equity
Answer: C) Income Statement
Financial Accounting Past Essay Questions
- Discuss the importance of the trial balance in the accounting process.Sample Answer: The trial balance is a critical tool in the accounting process, serving as a check on the accuracy of the double-entry bookkeeping system. It lists all the general ledger accounts and their balances at a specific point in time. The primary importance of the trial balance includes:
- Error Detection: It helps in identifying mathematical errors in the ledger. If the total debits do not equal the total credits, it indicates an error that needs investigation.
- Financial Statement Preparation: A balanced trial balance provides a foundation for preparing financial statements, such as the income statement and balance sheet.
- Management Tool: It provides management with a snapshot of the company’s financial position, aiding in decision-making.
Overall, the trial balance is essential for ensuring accuracy and reliability in financial reporting.
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- Cash Basis Accounting: This method records revenues and expenses only when cash is received or paid. It is straightforward and provides a clear picture of cash flow. However, it may not accurately reflect the company’s financial position at any given time, as it does not account for money that is owed or receivable.
- Accrual Basis Accounting: In contrast, accrual accounting records revenues and expenses when they are earned or incurred, regardless of when cash is exchanged. This method provides a more accurate picture of a company’s financial health, as it includes all obligations and receivables. However, it can be more complex and requires more detailed record-keeping.Explain the difference between cash basis and accrual basis accounting.Sample Answer: Cash basis and accrual basis accounting are two fundamental methods of recording financial transactions:
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