Waec 2019 Book keeping Obj & Theory Question and Answers 


Book Keeping OBJ:
1-10: CDBBBCDDCB
11-20: CDBADCAAAA
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1a) A trading account is an account which is prepared to determine the gross profit or gross loss of a business.
2a) Discount is an allowance or
concession in price. Discount is given so that the buyer is induced (lured) to place an order and later to make payment in time.
Discount can be also referred to as a deduction in price. The seller deducts the discount from the gross or total price, and the buyer is supposed to pay the net amount.
2b)
-i- • It lower operational business costs.
• Increases purchasing power.
• Improves goodwill.
• Higher consumer sales
-ii- • Increases cash flow.
• Helps Get the Sale and Spread the News
• Attracts New Customers
• Provides Lower Card Processing Fees
4b) a) To Calculate the True Profits:
Depreciation is an expense and becomes an important element of the cost of production. Though it is not visible like other expenses and never paid to the outside party yet it is desirable to charge depreciation on fixed assets as these are used for earning purposes; so their depreciation must be deducted out of the income earned from their use in order to calculate true profit net or loss.
b) To show true Financial Position:
Financial position can be studied from the balance sheet and for the preparation of balance sheet fixed assets are required to be shown at their true value. If assets are shown in the balance sheet without any charge made for their use or depreciation, then their value must have been overstated in the balance sheet and will not reflect the true financial position of he busines
(4a)
Depreciation refers to two aspects of the same concept: The decrease in value of assets The allocation of the cost of assets to periods in which the assets are used. Depreciation is a method of reallocating the cost of a tangible asset over its useful life span of it being in motion.
(4b)
PIck any two
(i) To Calculate the True Profits
(ii) To show true Financial Position
(iii) To make Provision for replacement of assets
(iv) To have some Incidental advantage
(v) To have Tax advantage
(4ci)
Fixed Instalment
fixed installment method of depreciation the amount of depreciation each year is fixed and equal. At the end of each year, a fixed amount is removed from the book value of the asset concerned and charged to profit and loss account (or income statement ).
This is the oldest and most commonly used method of depreciation. Here a fixed amount of depreciation is charged every year during the lifetime of the machine. There at the end of its useful life, the value of the asset will be zero. This is also known as straight-line method or original cost method.

(4cii)
Dimishing Balance
Diminishing balance depreciation method is one of the three
depreciation methods that mention in IAS 16. This kind of
depreciation method is said to be high charged at the first period, and then subsequently reduce.
This is because the charging rate is applying to the Net Book Value of Assets and the Net Book Value of Assets is reduce from time to time after charging depreciation.

4ci) Fixed installment method is one of the methods of allocating depreciation. In this method, every year a fixed amount of depreciation is deducted from the value of assets and the same amount is debited to profit and loss account. The book value of the assets is reduced to zero at the end of the expected life.

II) In Diminishing Balance Interest Rate method, interest is calculated every month on the outstanding loan balance as reduced by the principal repayment every month. … On every EMI payment, outstanding loan amount reduces by the amount of principal repayment

4ci)Fixed installment method is one of the methods of allocating depreciation. In this method, every year a fixed amount of depreciation is deducted from the value of assets and the same amount is debited to profit and loss account. The book value of the assets is reduced to zero at the




(8a)
Journal entry
Sales account
Dr 49,000
Suspense of account being error of principle and now corrected
Cr 49,000
Lammidu’s Account
Dr 76,200
Suspense account being error of parties omission now corrected
Cr 76,200
Discount allowed
Dr 57,000
Discount received
Dr 57,000
Suspense account being error of principle of complete
Cr 114,000
Return inward account
Dr 30,000
Suspense account under cast in return inward now corrected
Cr 30,000

(8b)
difference in trial balance recorded
Dr 269,200
Total =269,200
Credit side
Sales 49,000
Lammidu’s AK 76,200
Discount allowed 57,000
Discount received 57,000
Return inward 30,000
Total =269,200
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