Bookkeeping WAEC Past Questions And Answers (Objective and Theory)

20 WAEC Questions to Boost Your Understanding

Multiple Choice Questions:

Question: What is the primary purpose of a ledger in bookkeeping?

a) Record daily transactions

b) Calculate profit and loss

c) Create financial statements

d) Manage payroll

Answer: a) Record daily transactions

Question: Which accounting principle ensures that all transactions are recorded and reported accurately?

a) Matching Principle

b) Consistency Principle

c) Materiality Principle

d) Accrual Principle

Answer: d) Accrual Principle

Question: What is the formula for calculating Net Profit?

a) Revenue – Expenses

b) Assets – Liabilities

c) Revenue + Expenses

d) Assets + Liabilities

Answer: a) Revenue – Expenses

Question: What is the purpose of the trial balance?

a) Prepare financial statements

b) Identify errors in accounts

c) Record daily transactions

d) Calculate tax liabilities

Answer: b) Identify errors in accounts

Question: In double-entry bookkeeping, when a liability decreases, which account is credited?

a) Asset account

b) Liability account

c) Revenue account

d) Expense account

Answer: b) Liability account

Theory Section:

Question: Define the term “Depreciation” and explain its significance in bookkeeping.

Answer: Depreciation is the systematic allocation of the cost of a tangible asset over its useful life. It is essential in bookkeeping as it reflects the gradual reduction in the value of assets over time, providing a more accurate representation of the company’s financial health.

Question: How does the cash basis of accounting differ from the accrual basis? Provide examples.

Answer: The cash basis recognizes transactions when cash is exchanged, while the accrual basis records transactions when they occur, regardless of the cash flow. For example, under cash basis, revenue is recognized when payment is received, while under accrual basis, it’s recognized when the sale is made.

Question: Explain the term “Trial Balance” and its significance in the bookkeeping process.

Answer: A trial balance is a list of all general ledger accounts with their respective debit or credit balances. Its significance lies in identifying errors in the accounting system and ensuring that total debits equal total credits, maintaining the accuracy of financial records.

Question: Elaborate on the concept of “Internal Control” in bookkeeping and its role in preventing fraud.

Answer: Internal control involves implementing processes to safeguard assets, maintain accurate records, and ensure compliance. It plays a crucial role in preventing fraud by establishing checks and balances, segregation of duties, and regular audits to detect and deter fraudulent activities.

Question: Discuss the importance of the “Chart of Accounts” in bookkeeping and provide examples of different account categories.

Answer: The Chart of Accounts is a systematic listing of all accounts used by a company. It organizes financial information, making it easier to track and analyze. Examples of account categories include assets (e.g., cash, inventory), liabilities (e.g., loans, accounts payable), and equity (e.g., common stock, retained earnings).