Accounting Waec Past Questions And Answers (Objective and Theory)
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.