Financial Accounting Mock 2023

WASSCE style · Study mode

Financial Accounting Mock 2023

Question 1 of 50

A debt that cannot be recovered is written off to the

A. bad debts account B. sales account C. capital account D. cash book

Question 2 of 50

Profit attributable to shareholders and paid out to them is a

A. dividend B. debenture C. loan D. premium

Question 3 of 50

In a club's accounts, an excess of income over expenditure is a

A. surplus B. profit C. gross profit D. capital gain

Question 4 of 50

Which statement of the accounting equation is correct?

A. Liabilities = Assets + Capital B. Assets = Capital − Liabilities C. Capital = Assets + Liabilities D. Assets = Capital + Liabilities

Question 5 of 50

An error where a transaction is completely left out of the books is an error of

A. commission B. omission C. principle D. original entry

Question 6 of 50

When a trial balance does not agree, the difference is temporarily placed in a

A. sales account B. capital account C. drawings account D. suspense account

Question 7 of 50

Cost of sales = opening inventory + purchases −

A. drawings B. sales C. expenses D. closing inventory

Question 8 of 50

A business has assets of GH¢50,000 and liabilities of GH¢20,000. Its capital is

A. GH¢70,000 B. GH¢30,000 C. GH¢20,000 D. GH¢50,000

Question 9 of 50

In double entry, every transaction affects

A. the bank only B. one account only C. at least two accounts D. the capital only

Question 10 of 50

An increase in an asset is recorded as a

A. reversal B. credit C. neither D. debit

Question 11 of 50

An increase in a liability is recorded as a

A. debit B. credit C. neither D. drawing

Question 12 of 50

Prepaid rent at the year-end is shown as

A. a current asset B. a current liability C. income D. capital

Question 13 of 50

The sales ledger control account contains totals of

A. credit sales and receipts from customers B. cash purchases C. wages D. capital introduced

Question 14 of 50

Accumulated depreciation is shown in the statement of financial position as

A. a deduction from the cost of the asset B. a current liability C. income D. capital

Question 15 of 50

Money paid into the bank but not yet shown on the bank statement is

A. an uncredited lodgement B. an unpresented cheque C. a bank charge D. a standing order

Question 16 of 50

A customer's cheque returned unpaid by the bank is

A. a dishonoured cheque B. an unpresented cheque C. a bank charge D. a crossed cheque

Question 17 of 50

Interest credited by the bank should be

A. debited in the cash book B. credited in the cash book C. ignored D. charged to capital

Question 18 of 50

Subscriptions owed by club members at the year-end are

A. subscriptions in arrears (a current asset) B. subscriptions in advance C. a liability D. capital

Question 19 of 50

The concept that requires revenue to be matched with the expenses incurred to earn it is the

A. consistency concept B. accruals (matching) concept C. money measurement concept D. dual aspect concept

Question 20 of 50

Prudence requires that

A. assets are overstated B. all profits are anticipated C. losses are provided for but profits are not anticipated D. no provisions are made

Question 21 of 50

When a business buys goods on credit from Mensah, the entry is

A. debit purchases, credit cash B. debit Mensah, credit purchases C. debit cash, credit purchases D. debit purchases, credit Mensah

Question 22 of 50

Returns of goods by customers are recorded in the

A. purchases day book B. returns outwards day book C. returns inwards day book D. general journal

Question 23 of 50

The owner withdraws GH¢500 cash for personal use. The entry is

A. debit expenses, credit cash B. debit cash, credit drawings C. debit capital, credit drawings D. debit drawings, credit cash

Question 24 of 50

Recording the purchase of a motor van in the purchases account is an error of

A. commission B. omission C. principle D. reversal

Question 25 of 50

Opening inventory GH¢2,000, purchases GH¢10,000, closing inventory GH¢3,000. Cost of sales is

A. GH¢15,000 B. GH¢9,000 C. GH¢11,000 D. GH¢5,000

Question 26 of 50

Rent owing at the end of the year is shown in the statement of financial position as

A. a non-current asset B. a current asset C. a current liability D. capital

Question 27 of 50

A machine costs GH¢10,000, has a residual value of GH¢2,000 and a life of 4 years. Straight-line depreciation per year is

A. GH¢2,000 B. GH¢2,500 C. GH¢3,000 D. GH¢8,000

Question 28 of 50

A debt that cannot be recovered is written off by debiting

A. bad debts account B. the customer's account C. sales account D. cash account

Question 29 of 50

The sales ledger control account is also called the

A. trade receivables control account B. trade payables control account C. cash control account D. suspense account

Question 30 of 50

Cheques issued but not yet presented to the bank are

A. unpresented cheques B. dishonoured cheques C. uncredited cheques D. standing orders

Question 31 of 50

Bank charges shown only on the bank statement should be

A. entered in the cash book B. ignored C. added to the bank balance D. entered in the sales book

Question 32 of 50

In the absence of a partnership agreement, profits are shared

A. equally B. by capital ratio C. by age D. by hours worked

Question 33 of 50

A non-profit organisation prepares an income and expenditure account instead of

A. an income statement B. a cash book C. a trial balance D. a ledger

Question 34 of 50

Holders of ordinary shares receive

A. dividends that vary with profit B. a fixed rate of interest C. no return D. salaries

Question 35 of 50

Paying a creditor GH¢300 by cheque is recorded as

A. debit purchases, credit bank B. debit bank, credit creditor C. debit creditor, credit bank D. debit capital, credit bank

Question 36 of 50

Inventory turnover of 8 times a year means inventory is held on average for about

A. 46 days B. 8 days C. 30 days D. 365 days

Question 37 of 50

Net profit GH¢18,000 and capital employed GH¢120,000 give ROCE of

A. 15% B. 18% C. 6.7% D. 12%

Question 38 of 50

Recording a machine at cost rather than its current market value follows the

A. realisation concept B. going concern concept C. historical cost concept D. materiality concept

Question 39 of 50

Treating the owner and the business as separate is the

A. accruals concept B. dual aspect concept C. consistency concept D. business entity concept

Question 40 of 50

Income is recognised when earned, not when cash is received, under the

A. cash concept B. accruals concept C. prudence concept D. money measurement concept

Question 41 of 50

Providing for doubtful debts is an application of the

A. realisation concept B. entity concept C. prudence concept D. going concern concept

Question 42 of 50

Returns inwards are recorded in the

A. purchases day book B. sales returns day book C. cash book D. purchases returns day book

Question 43 of 50

A trade discount is

A. debited to discount allowed B. not recorded in the ledger C. credited to discount received D. recorded in the cash book

Question 44 of 50

An error of principle occurs when

A. an entry is omitted B. figures are reversed C. revenue expenditure is debited to an asset account D. the wrong customer is debited

Question 45 of 50

An auditor who owns shares in the client company faces a threat to

A. independence (self-interest threat) B. competence C. confidentiality D. courtesy

Question 46 of 50

On admission of a partner, revaluation gain on assets is credited to

A. old partners in their old ratio B. the new partner only C. all partners equally D. the income statement

Question 47 of 50

Fixed costs GH¢30,000; C/S ratio 40%. Sales needed for a profit of GH¢10,000 are

A. GH¢100,000 B. GH¢75,000 C. GH¢40,000 D. GH¢16,000

Question 48 of 50

Goods taken by the owner for personal use are recorded by debiting

A. sales and crediting cash B. purchases and crediting drawings C. capital and crediting sales D. drawings and crediting purchases

Question 49 of 50

A discount allowed is debited to the discount allowed account and credited to

A. cash account B. the supplier's account C. the customer's account D. sales account

Question 50 of 50

Credit purchase of a motor van is first recorded in the

A. sales day book B. purchases day book C. cash book D. journal proper

Questions written by OtisamLMS in the style of the WASSCE. They are not WAEC past questions.