WASSCE 2019 Financial Accounting Questions and Answers
Fresh Financial Accounting Practice Questions, Step-by-Step Solutions, MCQs, Topic Analysis, Chapter Analysis and Difficulty Assessment
WASSCE Financial Accounting 2019 Practice
This page is designed for students preparing for WASSCE Financial Accounting. The questions below are newly written practice questions covering important accounting concepts and calculation methods.
Each main question has a separate colour-coded area for the question, answer, solution and analysis. This makes the page easy to read and useful for revision.
The content below is an original practice set written in a WASSCE-style format. It is not a word-for-word reproduction of an official examination paper.
Paper Overview
Section A: Questions, Answers & Analysis
The accounting equation is:
Assets = Capital + Liabilities
Initial transaction:
Cash = ₦450,000 and Capital = ₦450,000.
After purchasing equipment for cash:
Cash decreases by ₦90,000 while equipment increases by ₦90,000. Total assets therefore remain unchanged.
After purchasing goods on credit:
Inventory increases by ₦70,000 and liabilities increase by ₦70,000.
Final assets:
₦450,000 + ₦70,000 = ₦520,000
Liabilities = ₦70,000.
Capital = ₦450,000.
Therefore:
₦520,000 = ₦450,000 + ₦70,000
The purchase of equipment does not create a liability because it was paid for immediately. The credit purchase, however, creates an amount payable to the supplier.
Balance according to cash book = ₦185,000.
Bank charges reduce the cash book balance:
₦185,000 − ₦5,000 = ₦180,000.
The direct credit increases the balance:
₦180,000 + ₦18,000 = ₦198,000.
Therefore, the adjusted cash book balance is ₦198,000.
Bank charges are an expense and therefore reduce the bank balance in the cash book. A direct credit received through the bank increases the balance.
Cost = ₦2,400,000.
Residual value = ₦400,000.
Depreciable amount:
₦2,400,000 − ₦400,000 = ₦2,000,000.
Annual depreciation:
₦2,000,000 ÷ 5 = ₦400,000.
Annual Depreciation = (Cost − Residual Value) ÷ Useful Life
Cost of Goods Sold:
Opening Inventory + Purchases − Closing Inventory
= ₦150,000 + ₦540,000 − ₦210,000
= ₦480,000.
Gross Profit:
Sales − Cost of Goods Sold
= ₦960,000 − ₦480,000
= ₦480,000.
First calculate the cost of goods sold. After that, subtract the cost of goods sold from sales to obtain gross profit.
Expense paid = ₦72,000.
Accrued expense = ₦8,000.
Total expense:
₦72,000 + ₦8,000
= ₦80,000.
An accrued expense belongs to the current accounting period even though it has not yet been paid. Therefore, it is added to the amount already paid.
Insurance paid = ₦96,000.
Prepaid amount = ₦12,000.
Current year’s expense:
₦96,000 − ₦12,000
= ₦84,000.
The prepaid amount belongs to the next accounting period and should therefore not be treated as an expense of the current period.
Total ratio = 3 + 2 = 5.
Partner A:
3/5 × ₦250,000 = ₦150,000.
Partner B:
2/5 × ₦250,000 = ₦100,000.
Therefore:
A = ₦150,000
B = ₦100,000
₦150,000 + ₦100,000 = ₦250,000.
The total agrees with the profit available for distribution.
A suspense account may be opened when the debit and credit totals of a trial balance do not agree and the cause of the difference has not yet been identified.
The difference can temporarily be placed in a suspense account while the accounting records are investigated.
Once the error is located and corrected, the suspense account should be cleared.
A suspense account is a temporary account. It should not normally remain open after all relevant errors have been identified and corrected.
Capital expenditure is expenditure incurred to acquire or improve a non-current asset or to provide a long-term benefit to the business.
Example: Purchase of machinery.
Revenue expenditure is expenditure incurred in the normal day-to-day running of the business.
Example: Office electricity expense.
Capital expenditure generally provides a long-term benefit, whereas revenue expenditure is connected with the regular operation of the business.
Trade discount:
8% of ₦500,000
= 8/100 × ₦500,000
= ₦40,000.
Amount payable:
₦500,000 − ₦40,000
= ₦460,000.
The discount is calculated first. The discount amount is then deducted from the listed price.
The amount is treated as a bad debt because the business no longer expects to recover it from the customer.
The customer’s receivable balance is reduced by ₦45,000.
The bad debt is recognised as an expense in determining the profit for the period.
Bad debt reduces the amount expected to be collected from receivables and also reduces profit through the recognition of the expense.
Gross Profit = ₦180,000.
Sales = ₦600,000.
Gross Profit Percentage:
= Gross Profit ÷ Sales × 100
= ₦180,000 ÷ ₦600,000 × 100
= 0.3 × 100
= 30%.
Gross Profit Percentage = Gross Profit ÷ Sales × 100
Section B: Financial Accounting MCQs
Which account is credited when the owner introduces cash as capital?
Which item is normally classified as a current asset?
A cheque issued by a business but not yet presented to the bank is called:
Closing inventory is generally used when determining:
Under the straight-line method, depreciation per year is generally:
The ratio in which partners share profit is normally determined by:
Which of the following is most likely to be capital expenditure?
A person who owes money to a business because of credit sales is called:
The trial balance mainly checks:
Cash taken from the business by the owner for personal use is called:
An expense incurred but not yet paid is known as:
A trade discount is normally deducted from:
An amount due from a customer that is no longer expected to be recovered is:
Gross profit is calculated by deducting cost of goods sold from:
A suspense account is generally:
Detailed Topic and Chapter Analysis
1. Final Accounts
Final-account questions test the student’s ability to move from basic transaction records to the calculation of trading results and financial position. Opening inventory, purchases, closing inventory and sales should be clearly understood.
2. Bank Reconciliation
Bank reconciliation requires careful comparison between the cash book and the bank statement. Timing differences and entries appearing in one record but not the other are especially important.
3. Adjustments
Accrued expenses and prepaid expenses affect the amount that belongs to the current accounting period. Students should learn the direction of each adjustment rather than memorising isolated examples.
4. Depreciation
Depreciation questions require understanding of the cost of an asset, residual value and useful life. Students should be able to apply the straight-line method accurately.
5. Partnership Accounting
Partnership questions focus on the agreement between partners and the method used to distribute profit. Ratios, salaries, interest and drawings can all affect the final amount received by each partner.
6. Errors and Suspense
Students need to distinguish between different types of accounting errors and understand why a suspense account can temporarily hold an unexplained difference.
7. Capital and Revenue
The distinction between capital and revenue expenditure is fundamental. Questions may test both definitions and practical classification of transactions.
Difficulty Analysis
| Level | Nature of Question | Recommended Preparation |
|---|---|---|
| Easy | Definitions and direct calculations | Revise terminology and basic formulas |
| Moderate | Multi-step calculations and adjustments | Practise complete worked examples |
| Difficult | Several accounting concepts combined | Attempt timed full-length questions |
Question-Type Analysis
| Question Type | What It Tests | Difficulty |
|---|---|---|
| Definition | Accounting terminology | Easy |
| Calculation | Numerical accuracy | Easy–Moderate |
| Adjustment | Accounting period treatment | Moderate |
| Ratio | Profit distribution | Moderate |
| Concept Explanation | Understanding accounting principles | Moderate |
| MCQ | Quick concept recognition | Easy–Moderate |
How to Prepare for Financial Accounting
- Begin with the rules of debit and credit.
- Practise source documents and books of original entry.
- Revise ledger posting and trial balance preparation.
- Solve cash-book and bank-reconciliation exercises.
- Practise depreciation and adjustment calculations.
- Study final accounts using complete sets of figures.
- Revise partnership profit-sharing methods.
- Practise error correction and suspense-account questions.
- Attempt MCQs regularly to improve speed.
- Analyse every incorrect answer after each practice test.
Common Financial Accounting Mistakes
Incorrect Debit and Credit Treatment
Always identify the accounts affected by a transaction before deciding which account should be debited or credited.
Ignoring Adjustments
Accrued and prepaid expenses can change the final figures significantly. Students should read every adjustment carefully.
Wrong Formula
Write the relevant accounting formula before inserting the figures. This reduces errors in depreciation, gross profit and ratio calculations.
Poor Presentation
Use clear headings and show important working steps. A well-organised answer makes the accounting treatment easier to follow.
Frequently Asked Questions
What is this WASSCE Financial Accounting page?
It is a practice resource containing original Financial Accounting questions, answers, MCQs and topic analysis for examination preparation.
Are these the exact 2019 examination questions?
No. The questions are newly written practice questions presented in a WASSCE-style format rather than a reproduction of an official paper.
Does every main question have an answer?
Yes. Each main question is followed by a separate answer section, working explanation and question analysis.
What topics are included?
The set covers accounting equations, bank reconciliation, depreciation, final accounts, adjustments, partnership accounting, suspense accounts, capital and revenue expenditure, bad debts and profitability calculations.
Are there Financial Accounting MCQs?
Yes. The MCQ section contains fifteen fresh objective questions with four options and clearly marked correct answers.
How should I use the solutions?
Attempt each question first without looking at the answer. After finishing, compare your working with the solution and identify the exact accounting concept that caused any mistake.
Which areas deserve extra practice?
Final accounts, adjustments, bank reconciliation, partnership accounting and error correction usually require more than simple definition-based learning.
How can I improve my calculation speed?
Practise short accounting calculations regularly and gradually move toward complete questions involving several figures and adjustments.
Final Paper Analysis
This practice set combines theoretical and numerical Financial Accounting questions. The purpose is to develop both conceptual understanding and the ability to apply accounting rules to practical situations.
The questions involving final accounts, adjustments, bank reconciliation and partnership require students to read the information carefully before starting calculations.
The MCQ section can be used for rapid revision after completing the longer questions. Students should record the topics where they make mistakes and return to those chapters before attempting another mock paper.
Concept → Example → Independent Question → Working Check → Mistake Analysis → Similar Question → Timed Practice