Financial Accounting Mock 2022

WASSCE style · Study mode

Financial Accounting Mock 2022

Question 1 of 50

The historical cost concept records assets at

A. their original purchase price B. their current market value C. their replacement cost D. their selling price

Question 2 of 50

An excess of income over expenditure in a club is a

A. surplus B. profit C. loss D. deficit

Question 3 of 50

The principle requiring accountants not to disclose client information without permission is

A. confidentiality B. objectivity C. professional competence D. integrity

Question 4 of 50

Falsifying financial statements to show higher profits is

A. fraud B. prudence C. consistency D. accrual

Question 5 of 50

The current ratio is

A. current assets ÷ current liabilities B. current liabilities ÷ current assets C. net profit ÷ sales D. sales ÷ inventory

Question 6 of 50

A cash budget shows

A. expected cash receipts and payments B. actual profits C. fixed assets D. share prices

Question 7 of 50

At break-even point, profit is

A. zero B. maximum C. negative D. equal to fixed costs

Question 8 of 50

The dual aspect concept states that

A. only cash is recorded B. every transaction has two equal and opposite effects C. assets are valued at market price D. profits are shared equally

Question 9 of 50

Users of financial statements include

A. no one B. only the accountant C. only competitors D. owners, lenders, employees and government

Question 10 of 50

Cash sales of GH¢800 are recorded by

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

Question 11 of 50

Net profit is added to capital in the

A. sales day book B. trial balance C. cash book D. statement of financial position

Question 12 of 50

Carriage inwards is treated as part of

A. cost of sales B. selling expenses C. capital D. non-current assets

Question 13 of 50

Carriage outwards is treated as

A. a selling and distribution expense B. part of cost of sales C. a liability D. income

Question 14 of 50

Sales GH¢40,000, cost of sales GH¢25,000, expenses GH¢6,000. Net profit is

A. GH¢9,000 B. GH¢15,000 C. GH¢21,000 D. GH¢31,000

Question 15 of 50

The going concern concept assumes that the business will

A. continue in operation for the foreseeable future B. close next month C. be sold immediately D. make no profit

Question 16 of 50

The consistency concept requires

A. the same accounting methods to be used from year to year B. methods to change every year C. only cash accounting D. no depreciation

Question 17 of 50

The materiality concept means

A. insignificant items need not be treated strictly B. all items must be capitalised C. only cash is recorded D. assets are revalued yearly

Question 18 of 50

An error of commission occurs when an entry is

A. posted to the wrong person's account of the correct class B. omitted entirely C. posted to the wrong class of account D. reversed

Question 19 of 50

A complete reversal of entries is when

A. the debit and credit accounts are swapped B. the amount is wrong C. the entry is missed D. two errors cancel

Question 20 of 50

A credit transfer received by the bank but not yet in the cash book is

A. added in the cash book B. deducted in the cash book C. ignored D. added to the bank statement

Question 21 of 50

A receipts and payments account is a summary of

A. the cash book B. the income statement C. the balance sheet D. the purchases book

Question 22 of 50

The capital of a club is called the

A. accumulated fund B. share capital C. drawings D. reserve fund only

Question 23 of 50

Objectivity means an accountant should

A. not allow bias or conflicts of interest to affect judgement B. favour friends C. accept gifts freely D. hide errors

Question 24 of 50

The professional body for chartered accountants in Ghana is

A. ICAG B. GRA C. GSA D. NCA

Question 25 of 50

Gross profit GH¢20,000 on sales of GH¢80,000 gives a gross profit margin of

A. 25% B. 20% C. 40% D. 4%

Question 26 of 50

The acid test (quick) ratio excludes

A. inventory B. cash C. receivables D. bank

Question 27 of 50

Cost of sales GH¢60,000 and average inventory GH¢10,000 give an inventory turnover of

A. 6 times B. 10 times C. 0.17 times D. 60 times

Question 28 of 50

The appropriation account of a partnership shows

A. how net profit is shared among partners B. gross profit C. cash received D. assets bought

Question 29 of 50

A partner's current account records

A. salaries, interest, share of profit and drawings B. only capital introduced C. fixed assets D. loans from banks

Question 30 of 50

Goodwill is

A. the value of a business's reputation above its net assets B. a current asset C. cash at bank D. a liability

Question 31 of 50

The margin of safety is

A. actual sales minus break-even sales B. fixed costs minus profit C. variable cost per unit D. sales price minus cost

Question 32 of 50

The money measurement concept means that

A. staff morale is recorded B. all events are recorded C. only transactions that can be expressed in money are recorded D. goodwill is always recorded

Question 33 of 50

The realisation concept states that revenue is recognised when

A. cash is received only B. goods are delivered or services rendered C. orders are placed D. goods are produced

Question 34 of 50

Goods returned to a supplier are recorded in the

A. sales day book B. returns inwards day book C. returns outwards day book D. cash book

Question 35 of 50

The purchase of a motor van on credit is first recorded in the

A. petty cash book B. purchases day book C. sales day book D. general journal

Question 36 of 50

Which error does NOT affect the agreement of the trial balance?

A. balance omitted B. single entry C. casting error on one side D. error of commission

Question 37 of 50

Opening inventory GH¢5,000, purchases GH¢20,000, closing inventory GH¢3,000. Cost of sales is

A. GH¢18,000 B. GH¢28,000 C. GH¢22,000 D. GH¢25,000

Question 38 of 50

Rent paid GH¢1,300 includes GH¢100 prepaid. Rent charged to profit or loss is

A. GH¢1,400 B. GH¢1,200 C. GH¢1,300 D. GH¢100

Question 39 of 50

Accrued wages at year end are shown as a

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

Question 40 of 50

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

A. GH¢2,500 B. GH¢2,000 C. GH¢3,000 D. GH¢1,500

Question 41 of 50

Debtors GH¢20,000; allowance for doubtful debts 5%. The allowance is

A. GH¢2,000 B. GH¢1,000 C. GH¢500 D. GH¢100

Question 42 of 50

In the sales ledger control account, cash received from debtors appears on the

A. either side B. debit side C. credit side D. neither side

Question 43 of 50

Rent of GH¢400 paid was entered on the credit side of the rent account. The suspense account will show

A. GH¢400 B. GH¢800 C. nil D. GH¢200

Question 44 of 50

Sales GH¢40,000; cost of sales GH¢30,000. The gross profit margin is

A. 10% B. 33.3% C. 75% D. 25%

Question 45 of 50

Gross profit GH¢15,000; expenses GH¢9,000; discount received GH¢500. Net profit is

A. GH¢24,500 B. GH¢5,500 C. GH¢6,000 D. GH¢6,500

Question 46 of 50

Cost of sales GH¢30,000; average inventory GH¢5,000. The rate of inventory turnover is

A. 5 times B. 6 times C. 0.17 times D. 35 times

Question 47 of 50

Mark-up of 25% on cost is equivalent to a margin of

A. 33⅓% B. 25% C. 20% D. 75%

Question 48 of 50

Goods costing GH¢800 are sold at a margin of 20%. The selling price is

A. GH¢1,600 B. GH¢960 C. GH¢640 D. GH¢1,000

Question 49 of 50

Reducing balance at 20% on GH¢5,000. Depreciation in year 2 is

A. GH¢640 B. GH¢1,000 C. GH¢800 D. GH¢4,000

Question 50 of 50

A bad debt recovered is credited to

A. bad debts recovered account B. the debtor's account only C. sales D. purchases

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