financial accounting questions

financial accounting questions

Financial Accounting Questions

TOPIC TO BE TESTED : • Application of “Rules of debit and credit” LEARNING OBJECTIVES: • To develop an understanding for applying the rules of debit and credit

On 1st March 2013, Mr. Adnan organized a business called A.R Rentals. Mr. Adnan’s new business was able to begin operations immediately by purchasing the assets and taking over the location of Ammar Rentals, an equipment rental business. Below are the transactions for the month of March 2013: Date 2013 March 01 Transactions Mr. Adnan deposited Rs. 900,000 cash in the name of his business - A. R Rentals in the bank.

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WAEC Financial Accounting Questions 2017 [Theory and Objective] | Check Financial Accounting Random Repeated Questions Here

WAEC Financial Accounting Questions 2017 [Theory and Objective] | Check Financial Accounting

Random Repeated Questions Here.

Financial Accounting, WAEC Financial Accounting, Financial Accounting WAEC Questions 2017 | In this article, I will be showing you past WAEC Financial Accounting objective and theory random repeated questions for free. You will also understand how WAEC Financial Accounting questions are set and many more examination details. All you need to do is to stay focus and follow this guide…

The West African Examinations Council (WAEC) is an examination board that conducts the West African Senior School Certificate Examination, for University and Jamb entry examination in West Africa countries. … In a year, over three million candidates registered for the exams coordinated by WAEC.

There will be two papers – Paper 1 and Paper 2, both of which will constitute a composite paper to be taken at one sitting.

PAPER 1: Will comprise fifty multiple choice questions to be taken in 1 hour for 50 marks.

PAPER 2: Will be made up of two sections: Sections A and B and will last 2½ hours.

Section A: Will contain five essay questions on theory of financial accounting. Candidates will be required to answer two out of the four questions for 15 marks each.

Section B: Will contain five essay questions on financial accounting practice. Candidates will be required to answer three out of the questions for 15 marks each.

1. The double entry for a cheque returned by a bank to a customer marked “refer to drawer” is debit

A. bank, credit debtor.

B. bank, credit bad debt expenses.

C. bad debt expenses, credit bank.

D. debtor, credit bank.

2. Which of the following is a characteristic of joint venture?

A. The activities are of short term duration.

B. Individual maintains separate account.

C. There is perpetual succession.

D. There is limitation to membership

3. The person who retains ownership of goods on consignment is

A. commission agent.

B. del-credere agent.

WAEC Financial Accounting Questions 2017 [Theory and Objective] | Check Financial Accounting Random Repeated Questions Here.

4. The computer program instructions are read into the

D. central processing unit.

5. In Contract Accounts, retention money refers to the

A. amount due to the contractor but held back by the customer.

B. progressive payments made by the customer to the contractor.

C. contractor’s profit on the contract.

D. amount overpaid by the customer to the contractors.

1. (a) Distinguish between reserves and provisions

(b) Explain the following giving one example in each case:

2. (a) What is value added tax?

(b) Distinguish between input vat and output vat.

(c) State four features of Value Added Tax.

3. Explain the following terms as they are used in contract accounts:

(a) Notional profit;

(b) Retention money;

(c) Progress payments;

(d) Work certified;

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The income statement displays all revenues and expenses recorded in a period in a single report.

The balance sheet displays assets, liabilities, and owner’s equity.

The cash flow statement shows the changes in cash during a period.

The statement of stockholder’s equity shows the changes in equity during a period.

The purpose of financial accounting is to provide useful information for outside investors, creditors, and others.

Although this is a byproduct of financial accounting, it is not the primary purpose.

Minimizing taxes is not a part of financial accounting. Taxes fall under financial management.

Assets = Liabilities + Owner’s Equity.

Revenues are not included in the basic accounting equation.

Assets = Liabilities + Owner’s Equity.

The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.

The income statement summarizes revenues and expenses for a period. The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.

The cash flows statement summarizes cash activites for a period. The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.

The statement of stockholder’s equity summarizies changes in equity during a period.The balance sheet uses the expanded accounting equation to list assets, liabilities, and equity in a report format.

The accrual basis of accounting only records income when it is earned.

The accrual basis of accounting only records income when it is earned. The cash basis of accounting records income when collected. Contracts and availability are not used as revenue recognition principles for accrual accounting.

A T-account is a way to format accounting transactions that displays debits on the left and credits on the right.

The general journal is a record of business transactions– not an account format.

The general ledger is a list of accounts for business transactions– not an account format.

The ledger account is a record of business transactions for a specific account– not an account format.

financial accounting questions

Dan Lutz owns and operates an interior design studio called Lutz Design Studio. The following amounts summarize the financial position of his business on April 30, 19X5:

Assets =Liabilities + Owner's Equity

2,240 (Accounts Receivable)

5,400 (Accounts payable)

22,660 (Dan Lutz Capital)

Lutz received $12,000 as a gift and deposited the cash in the business bank account.

Paid off the beginning balance of accounts payable.

Performed services for a client and received cash cash of $1,100.

Collected cash from a customer on account, $750.

Purchased supplies on account, $720.

Consulted on the interior design of a major office building and billed the client for services rendered, $5,000.

Invested personal cash of $1,700 in the business.

Recorded the following business expenses for the month:

Paid office rent - $1200

Sold supplies to another interior designer for $80 cash, which was the cost of the supplies.

Withdrew cash of $1400 for personal use.

Analyze the effects of the preceding transactions on the accounting equation of Lutz Design Studio by adapting the format Assets =Liabilities + Owner's Equity (see format above).

Prepare the income statement of Lutz Design Studio for the month ended May 31, 19X5. List expenses in decreasing order by amount.

Prepare the statement of owner's equity of Lutz Design Studio for the month ended May 31, 19X5.

Prepare the balance sheet of Lutz Design Studio at May 31, 19X5.

-Participating preferred stock

Union Shipping Company has outstanding an issue of 3,000 shares of participating preferred stock that has a $100 par value and an 8 percent annual dividend. The preferred stockholders participate fully (on an equal per-share basis) with common stockholders in annual dividends of more than $9 per share for common stock. The firm has 5,000 shares of common stock outstanding.

1. If Union Shipping Company pays preferred stockholders their dividends and then declares an additional $100,000 in dividends, what is the total dividend per share for preferred and common stock?

2. If Union Shipping Company pays preferred stockholders their dividends and then declares an additional $40,000 in dividends, what is the total dividend per share for each type of stockholder?

3. If Union Shipping Company's preferred stock is cumulative and the past 2 years' dividends have been passed, what dividends will be received by each type of stockholder if the firm declares a total dividend of $30,000?

4. Rework #3 assuming that the total dividend payment is $20,000.

5. Rework #1 and #2 assuming that the preferred stock is non-particpating.

This problem involves the fundamentals of accounting

Bank balance: $8,000

Checks outstanding: $5,800

Note collected by the bank: $1,500

Deposits outstanding: $4,000

NSF check (bad check) returned for $300

What is the correct cash balance that should be reported in Mooner Sooner's balance sheet at the end of 2012?

checks outstanding $2250

deposits outstanding $1900

service fees $ 40

error: money corp wrote a check for $30 but recorded it incorredtly for $300

What is the amount of cash that should be reported in the company's balance sheet as of May 31?

a Debit Postage Expense, $100.

b Debit Supplies, $25.

c Credit Petty Cash, $350.

d Debit Petty Cash, $350.

Bank service charges = $20

Deposit outstanding = $150

Interest earned on the bank account = $10

Checks outstanding = $400

Which items should be deducted from and added to the bank balance in completing the reconciliation?

a Deduct checks outstanding; add service charges and deposit outstanding.

b Deduct interest earned; add deposit outstanding.

c Deduct checks outstanding; add deposit outstanding.

d Deduct deposit outstanding; add checks outstanding.

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