2024 WAEC FINANCIAL ACCOUNTING ANSWERS

F/Account-Obj: 01-10: CBADCBBBBA 11-20: ABBABCDDDC 21-30: BBCBBBBABB 31-40: DDCDCDDCBD 41-50: CBCACBCDCB (1a) (PICK ANY THREE) (i) Purchase of goods for resale (ii) Receiving goods as a gift or donation (iii) Return of goods purchased from suppliers (iv) Transfer of goods from one location to another within the company (v) Manufacturing or producing goods (iv) Conversion of raw materials into finished goods (1b) Goodwill is an intangible asset that represents the reputation, customer loyalty, and brand value of a business. It is an asset that is not easily measurable or physically quantifiable but can have a significant impact on the value and success of a business. Goodwill is associated with qualities such as trust, customer satisfaction, and positive relationships with stakeholders. (1c) (i) Water charges paid: Utility bill or receipt from the water company (ii) Credit sales: Sales invoice or sales receipt (iii) Credit purchases: Purchase invoice or purchase receipt (iv) Wages: Payroll record or wage slip (V) Cash payment: Cash receipt or payment voucher (vi) Electricity owed: Utility bill or invoice from the electricity provider (vii) Returns by customers: Sales return slip or return receipt (viii) Returns to suppliers: Purchase return slip or return receipt (ix) Cheque deposit: Deposit slip or bank statement (x) Dishonoured cheque: Bank statement or notification from the bank indicating the dishonored cheque (2a) A manufacturing account is a financial statement that summarizes the costs incurred in the production of goods during a specific accounting period. It includes direct and indirect costs associated with manufacturing, such as raw materials, labor, and factory overhead. The purpose of the manufacturing account is to calculate the total manufacturing cost and determine the cost of goods produced. (2b) (i) Direct materials (ii) Direct labor (iii) Direct expenses (2c) (i) Prime cost: It refers to the total cost of direct materials, direct labor, and direct expenses. It represents the main components of the production cost. (ii) Factory overhead: Also known as indirect costs, factory overhead includes all the expenses incurred in the production process that are not directly attributable to specific units. It includes costs like rent, utilities, depreciation, and maintenance. (iii) Work-in-progress: Work-in-progress (WIP) refers to goods that are in the process of being manufactured but are not yet finished. It represents the value of partially completed products at a specific point in time. (iv) Finished goods: Finished goods are the completed products that are ready for sale to customers. They have gone through the entire manufacturing process and are in their final form. (v) Market value of goods produced: The market value of goods produced refers to the estimated selling price of the finished goods at the time they are produced. It represents the value of the goods based on market demand and other factors. (3a) Bad debt refers to money that is owed to a company or individual but is unlikely to be paid back. It’s basically a debt that becomes uncollectible. (3b) (i) When the debtor declares bankruptcy and has no assets to repay the debt. (ii) When the debtor is untraceable or cannot be contacted. (iii) When the debt is too small to pursue legally or the cost of recovery outweighs the debt. (iv) When the debtor has passed away and there are no assets to settle the debt. (v) When the debtor refuses to pay and there is no legal recourse available. (3c) (i) Bad debts are specific debts that have been identified as uncollectible, while provision for doubtful debts is an estimated amount set aside to cover potential bad debts. (ii) Bad debts are written off when they are deemed uncollectible, while provision for doubtful debts remains as a reserve on the balance sheet. (iii) Bad debts directly impact the profit and loss statement, reducing the company’s net income, while provision for doubtful debts affects the balance sheet by reducing the accounts receivable balance. (iv) Bad debts are recognized after attempts to collect the debt have been made, while provision for doubtful debts is recognized as a precautionary measure before any specific debts are identified as uncollectible.