2024 WAEC GCE FIRST SERIES (JANUARY) FINANCIAL ACCOUNTING: 2024 WAEC GCE First Series ACCOUNTING QUESTIONS AND ANSWERS (5306)

(1a) A suspense account is an account used temporarily to carry doubtful entries and discrepancies pending their analysis and permanent classification.

(1c)

a.The gross profit margin is an easy calculation to determine the overall profitability of an organizations products or services. 

Formula:

Sales – (Total Labor + Materials + Overhead Costs)/ Sales x 100

(2a)

A share is a single unit of ownership in a company or financial asset. It is essentially an exchangeable piece of value of a company which can fluctuate up or down, depending on several different market factors.

(2b)

(i) Common shares

(ii) Ordinary shares

(2c)

(i) Prospectus; A prospectus is a formal document that is required by and filed with the Securities and Exchange Commission (SEC) that provides details about an investment offering to the public. A prospectus is filed for offerings of stocks, bonds, and mutual funds.

(ii) Revenue Reserve; Revenue reserve is the type of reserve that is created from the net profit that a company makes during a financial year. This reserve is not distributed to shareholders in the form of dividends but is kept for meeting future requirements of the business.

(iii) Forfeited Share; A forfeited share is a share in a publicly-traded company that the owner loses or forfeits by neglecting to live up to any number of purchase requirements. For example, a forfeiture may occur if a shareholder fails to pay an owed allotment (call money), or if he sells or transfers his shares during a restricted period.

(iv) Issued share capital; Issued share capital is simply the monetary value of the shares of stock a company actually offers for sale to investors. The number of issued shares generally corresponds to the amount of subscribed share capital, though neither amount can exceed the 'copied from e x a m p l a z a . c o m free' authorized amount.

(v) Authorized Share Capital; Authorized share capital is the number of stock units (shares) that a company can issue as stated in its memorandum of association or its articles of incorporation. Authorized share capital is often not fully used by management in order to leave room for future issuance of additional stock in case the company needs to raise capital quickly.

(3a)

Fixed assets refer to long-term tangible assets that are used in the operations of a business. They provide long-term financial benefits, have a useful life of more than one year, and are classified as property, plant, and equipment (PP&E) on the balance sheet.

(3b)

(i) Lapse of Time

(ii) Obsolescence

(iii) Wear and Year

(3c)

(i) Straight line depreciation is a common method of depreciation where the value of a fixed asset is reduced over its useful life. It's used to reduce the carrying amount of a fixed asset over its useful life. 

(ii) Reducing balance method is the amount of depreciation is calculated by applying a fixed percentage on the book value of the asset each year. In this way, the amount of depreciation each year is less than the amount provided for in the previous year.

(iii) Revaluation depreciation method is usually used to calculate depreciation of assets where, there are numerous small identifiable assets of low value but nevertheless of lasting value such as loose tools or livestock.

(4a)

(i) Government agencies

(ii) Management of public sector organisation

(iii) Donors and lenders

(iv) The legislature

(v) Controller and accountant general and Auditors

(4b)

(i) To ascertain the authenticity of transactions and their compliance with the established laws, regulations and statutes.

(ii) Providing evidence of stewardship.

(iii) Assisting planning and control.

(iv) Assisting objective and timely reporting.

(v) Providing the basis for decision-making