Past Questions and Answers

Accounting Waec Past Questions And Answers (Objective and Theory)

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Accounting Waec Past Questions And Answers (Objective and Theory)

Here are 20 WAEC Accounting questions, including a Theory section with 5 questions. Each multiple-choice question has four options, and the correct answer is indicated:

 

Multiple Choice Questions (1-15)

Which of the following is not a current liability?

 

A) Bank loan

B) Accounts payable

C) Prepaid expenses

D) Accrued expenses

Answer: C

What is the accounting equation?

 

A) Assets = Liabilities – Equity

B) Assets = Equity – Liabilities

C) Liabilities = Assets – Equity

D) Equity = Assets – Liabilities

Answer: D

When preparing a bank reconciliation, an outstanding check is considered a:

 

A) Deposit in transit

B) Deduct from the bank balance

C) Add to the book balance

D) Bank service charge

Answer: B

How is the cost of goods sold calculated?

 

A) Opening stock + Net purchases – Closing stock

B) Opening stock + Purchases – Closing stock

C) Opening stock – Purchases + Closing stock

D) Opening stock – Net purchases – Closing stock

Answer: B

What does the term “depreciation” refer to?

 

A) Increase in asset value

B) Decrease in asset value

C) Amortization of liabilities

D) Accrual of expenses

Answer: B

Which financial statement shows a company’s financial position at a specific point in time?

 

A) Income statement

B) Statement of changes in equity

C) Balance sheet

D) Cash flow statement

Answer: C

What is the purpose of a journal entry?

 

A) To summarize financial transactions

B) To record day-to-day business activities

C) To calculate net income

D) To prepare financial statements

Answer: B

In accounting, what does ROI stand for?

 

A) Return on Investment

B) Rate of Interest

C) Revenue on Income

D) Risk of Inflation

Answer: A

How is gross profit calculated?

 

A) Sales – Cost of goods sold

B) Net income – Operating expenses

C) Net sales – Operating expenses

D) Sales – Net income

Answer: A

What is the purpose of an income statement?

 

A) To show the financial position of a company

B) To record cash transactions

C) To report revenues and expenses over a period

D) To analyze changes in equity

Answer: C

Which of the following is a contra account?

 

A) Accumulated depreciation

B) Accounts payable

C) Prepaid expenses

D) Unearned revenue

Answer: A

What is the formula for calculating the debt-to-equity ratio?

 

A) Total debt / Total equity

B) Total equity / Total assets

C) Total debt / Net income

D) Total assets / Total equity

Answer: A

When is revenue recognized in accrual accounting?

 

A) When cash is received

B) When goods are delivered

C) When an invoice is issued

D) When expenses are paid

Answer: B

What is the role of a trial balance in accounting?

 

A) To summarize financial transactions

B) To identify errors in accounts

C) To calculate net income

D) To record adjusting entries

Answer: B

What is the formula for calculating the earnings per share (EPS)?

 

A) Net income / Total assets

B) Net income / Average shareholders’ equity

C) Total revenue / Number of shares

D) Dividends / Earnings

Answer: B

Theory Section (16-20)

Define the term “double-entry accounting” and explain its importance in financial record-keeping.

 

Discuss the concept of “cash flow” and its significance in evaluating a company’s financial health.

 

Explain the difference between a capital expenditure and a revenue expenditure, providing examples for each.

 

Describe the purpose of the “statement of cash flows” and how it contributes to a comprehensive financial analysis.

 

Discuss the ethical considerations accountants need to be mindful of in their professional practice, highlighting potential conflicts of interest and their resolution.

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