WASSCE Financial Accounting Questions and Answers
Fresh Practice Set — New Accounting Problems, Detailed Solutions, Objective Questions, Topic Analysis and Revision Guide
Financial Accounting Practice Set
This practice set focuses on areas that require both accounting knowledge and careful numerical reasoning. The questions cover control accounts, suspense accounts, incomplete records, inventory calculations, partnership, manufacturing, clubs and societies, depreciation, ratios and accounting concepts.
Each main question contains the answer immediately after the question, followed by a clear working method and a separate analysis section.
The questions below are freshly written examination-style revision questions. They are not presented as a verbatim copy of an official WASSCE paper.
Section A — Fresh Solved Questions
Answer
Opening receivables = ₦310,000
Add credit sales = ₦720,000
Less cash received = ₦590,000
Less returns inward = ₦35,000
Closing balance:
₦310,000 + ₦720,000 − ₦590,000 − ₦35,000
= ₦405,000
Step-by-Step Solution
Trade receivables increase when credit sales are made. They decrease when customers make payments or return goods.
Therefore:
Closing Receivables = Opening Balance + Credit Sales − Cash Received − Returns
The amount still owed by customers is ₦405,000.
Question Analysis
Answer
Opening payables = ₦480,000
Add credit purchases = ₦860,000
Less payments = ₦710,000
Less returns outward = ₦40,000
Closing payables:
₦480,000 + ₦860,000 − ₦710,000 − ₦40,000
= ₦590,000
Explanation
Credit purchases increase the amount owed to suppliers. Payments and returns reduce the amount owed.
The resulting balance of ₦590,000 represents the amount still payable to suppliers at the end of the period.
Question Analysis
Answer
A suspense account is a temporary account used to hold an unexplained difference in the trial balance until the underlying error is identified and corrected.
Concept Explanation
If the trial balance totals are unequal, the difference may be temporarily placed in a suspense account so that the financial statements can proceed while the accounting records are reviewed.
Once the error is located, the appropriate correcting entry is made and the suspense account should eventually be cleared.
Question Analysis
Answer
Average inventory:
(₦360,000 + ₦440,000) ÷ 2
= ₦400,000
Inventory turnover:
₦2,400,000 ÷ ₦400,000
= 6 times
Working
First calculate average inventory. Then divide cost of goods sold by the average inventory.
The result means the average inventory level was theoretically turned over six times during the period.
Question Analysis
Answer
ROCE:
= Operating Profit ÷ Capital Employed × 100
= ₦600,000 ÷ ₦4,000,000 × 100
= 15%
Interpretation
The business generates an operating return equal to 15% of the capital employed.
ROCE is generally more meaningful when compared with previous years or appropriate benchmarks.
Question Analysis
Answer
Gross profit:
28% × ₦2,500,000 = ₦700,000
Cost of goods sold:
₦2,500,000 − ₦700,000
= ₦1,800,000
Working
Since margin is expressed as a percentage of sales, multiply sales by 28%.
Once gross profit is known, subtract it from sales to determine cost of goods sold.
Question Analysis
Answer
Prime cost:
Direct materials + Direct labour
= ₦520,000 + ₦310,000
= ₦830,000
Total factory cost:
₦830,000 + ₦170,000
= ₦1,000,000
Explanation
Prime cost consists of direct materials, direct labour and other direct expenses where applicable.
Factory overhead is then added to arrive at the production cost before work-in-progress adjustments.
Question Analysis
Answer
Cost of production:
Production cost + Opening WIP − Closing WIP
= ₦1,800,000 + ₦120,000 − ₦150,000
= ₦1,770,000
Explanation
Opening work-in-progress represents incomplete production brought forward. Closing work-in-progress represents incomplete production carried forward.
Therefore, opening WIP is added and closing WIP is deducted.
Question Analysis
Answer
Interest on drawings:
₦120,000 × 10%
= ₦12,000
Working
Because the entire amount is withdrawn at the beginning of the year, it is assumed to remain outstanding for the full accounting year.
Interest = Principal × Rate × Time.
Question Analysis
Answer
- The existing business may have an established reputation and loyal customers.
- The business may have favourable relationships with suppliers and a strong market position.
- The business may have developed valuable non-physical advantages that help it earn profits.
Concept Explanation
Goodwill represents the value of favourable business attributes that are not normally represented by individual physical assets.
In partnership accounting, goodwill becomes particularly important when there is a change in the ownership structure or profit-sharing arrangement.
Question Analysis
Answer
Total receipts:
₦480,000 + ₦70,000 = ₦550,000
Total payments:
₦160,000 + ₦55,000 = ₦215,000
Net cash surplus:
₦550,000 − ₦215,000
= ₦335,000
Explanation
A Receipts and Payments Account records cash and bank receipts and payments. For this simplified question, the net amount is obtained by deducting the listed payments from the listed receipts.
Question Analysis
Answer
Received = ₦600,000
Less previous-year amount = ₦40,000
Less next-year amount = ₦50,000
Current-year subscription income:
= ₦510,000
Explanation
The amount relating to the previous year does not belong to the current period. The amount relating to the following year is also excluded because it has not yet been earned for the current period.
Question Analysis
Answer
Capital employed:
Non-current assets + Net current assets
= ₦3,200,000 + ₦800,000
= ₦4,000,000
Explanation
Capital employed represents the long-term funds invested in the business. One common approach is to add non-current assets to net current assets.
Question Analysis
Answer
Annual interest:
₦900,000 × 8% = ₦72,000
Nine-month interest:
₦72,000 × 9/12
= ₦54,000
Working
First calculate the annual interest. Then multiply it by the fraction of the year for which the borrowing was outstanding.
Nine months represents 9/12 of a year.
Question Analysis
Answer
- Relevance
- Faithful representation
- Comparability
- Verifiability
- Timeliness
- Understandability
Any four appropriate qualities may be stated.
Explanation
Useful accounting information should help users make informed economic decisions. It should be relevant to the decision, faithfully represent the underlying information and have supporting qualities such as comparability, verifiability, timeliness and understandability.
Question Analysis
Section B — 40 Fresh Financial Accounting MCQs
Attempt each objective question first, then use the highlighted answer for revision.
Which item normally reduces the balance of trade receivables?
Which transaction reduces the amount owed to a supplier?
A suspense account is generally:
Inventory turnover is mainly concerned with:
ROCE is primarily a measure of:
Prime cost normally includes:
Which is most likely a factory overhead?
Closing work-in-progress is normally:
Interest on drawings is normally:
Goodwill is best described as:
Subscriptions are commonly an important source of income for:
Capital employed can commonly be calculated as:
Interest for part of a year depends on:
Which quality helps users compare financial information between periods?
Verifiability means information can be:
Information is more useful when it is:
A receivables control account mainly summarises:
Credit purchases generally increase:
Returns outward are goods returned:
Returns inward are goods returned:
Average inventory is commonly calculated using:
Which ratio is mainly concerned with the return generated from capital?
Direct materials are materials that:
Opening work-in-progress is normally:
Interest on drawings is intended to compensate the partnership for:
Which factor can contribute to goodwill?
An Income and Expenditure Account follows mainly the:
A Receipts and Payments Account mainly records:
Net current assets are:
If annual interest is ₦48,000, interest for six months is:
Relevant accounting information is information that:
Faithful representation requires information to:
Timeliness is improved when financial information is:
Which error may not cause a trial balance to disagree?
A payables control account summarises transactions with:
Which item is generally excluded from prime cost?
A subscription received for a future accounting period is generally:
When an owner introduces additional cash into the business, owner’s capital:
Under the business entity concept, personal expenses of the owner should:
The main purpose of financial statements is to provide information about:
MCQ Topic Analysis
| Topic | MCQs | Focus Area | Level |
|---|---|---|---|
| Control Accounts | 1, 2, 17, 35 | Receivables and payables | Moderate |
| Suspense & Errors | 3, 34 | Error identification | Moderate |
| Ratio Analysis | 4, 5, 22, 29 | Performance and capital | Moderate |
| Manufacturing | 6, 7, 8, 23, 24, 36 | Production costs | Moderate |
| Partnership | 9, 10, 25, 26 | Drawings and goodwill | Moderate |
| Non-Profit Accounts | 11, 27, 28, 37 | Subscriptions and cash records | Moderate |
| Accounting Information | 14, 15, 16, 31, 32, 33 | Qualitative characteristics | Moderate |
| Basic Accounting | 18, 19, 20, 38, 39, 40 | Classification and principles | Easy–Moderate |
Complete Paper Analysis
Control Accounts
Control account questions test whether students can reconstruct the total amount owed by customers or owed to suppliers. Credit transactions increase the relevant balance, while payments and returns reduce it.
Suspense and Errors
Students need to distinguish between errors that affect the trial balance and errors that do not. A suspense account is temporary and should be cleared after the underlying difference has been explained.
Manufacturing Accounting
Manufacturing questions require a clear distinction between direct costs and factory overheads. Prime cost and production cost should not be confused. Work-in-progress adjustments can also change the final production figure.
Partnership Accounting
Partnership questions can involve interest on drawings, goodwill, profit sharing, partner capital and current accounts. Students should carefully follow the partnership agreement given in each question.
Non-Profit Organisations
Clubs and societies require students to understand the difference between cash-based Receipts and Payments Accounts and accrual-based Income and Expenditure Accounts.
Accounting Information
Theory questions may test relevance, faithful representation, comparability, verifiability, timeliness and understandability.
Difficulty Breakdown
| Level | Main Features | Recommended Approach |
|---|---|---|
| Easy | Direct formulas and basic concepts | Solve quickly and accurately |
| Moderate | Several figures or accounting adjustments | Show complete working |
| Challenging | Multiple concepts combined | Read carefully and analyse each figure |
Important Revision Areas for WASSCE Financial Accounting
Double Entry Bookkeeping
Understand how transactions affect different types of accounts. Practise both simple and compound entries instead of memorising isolated examples.
Final Accounts
Be comfortable with the trading section, profit or loss section and statement of financial position. Adjustments should be studied alongside the related financial statement.
Ratio Analysis
Learn the formulas and, more importantly, learn what each ratio tells the user about the business.
Control Accounts
Practise reconstructing receivables and payables from incomplete information. This develops accuracy with additions and deductions.
Manufacturing Accounts
Revise direct materials, direct labour, prime cost, factory overhead, production cost and work-in-progress.
Partnership Accounts
Study profit-sharing arrangements, interest on capital, interest on drawings, partner remuneration and goodwill.
Common Errors to Avoid
Using the Wrong Ratio Formula
Always identify whether the question asks for a liquidity ratio, profitability ratio or activity ratio before starting.
Ignoring the Time Period
Interest calculations for less than a full year require the appropriate fraction of the annual period.
Mixing Production Costs
Factory overhead should not automatically be included in prime cost. Prime cost is based primarily on direct production costs.
Forgetting Returns
Returns inward affect sales, while returns outward affect purchases. Confusing these two can change the entire calculation.
Ignoring Accounting Periods
Income and expenses should be matched with the period to which they relate. This is especially important for accruals and prepayments.
Frequently Asked Questions
What is covered in this WASSCE Financial Accounting set?
The set covers control accounts, suspense accounts, ratios, manufacturing accounts, partnership, non-profit organisations, accounting information and basic accounting principles.
Are the questions suitable for revision?
Yes. They are designed as original examination-style practice questions for students who want additional Financial Accounting revision.
Are the answers explained?
Yes. The numerical questions include calculations and working explanations, while theory questions include concise accounting explanations.
How many MCQs are included?
There are 40 objective questions with four options and a clearly marked correct answer.
Which section should students practise first?
Students can begin with the descriptive questions to strengthen concepts and then attempt the MCQs as a speed and recall exercise.
Are these copied from an official WASSCE paper?
No. The questions are original practice material written in an examination-style format.
Why is topic analysis included?
Topic analysis helps students identify which accounting areas each question tests and where further revision may be required.
How should calculation questions be attempted?
Identify the required figure, write the appropriate formula, substitute the numbers carefully, complete the working and then check whether the answer has the correct unit or format.
Final Revision Guide
Financial Accounting becomes easier when students understand the relationship between individual transactions and the financial statements they eventually affect. Rather than memorising isolated answers, focus on the reason behind each accounting treatment.
For numerical problems, keep the working organised. For ratio questions, learn both the formula and interpretation. For theory questions, use correct accounting terminology and provide short explanations rather than one-word answers when an explanation is requested.
A useful revision sequence is to begin with double-entry principles, move to ledger accounts and trial balance, then study adjustments and final accounts. After that, revise ratios, partnership, manufacturing and specialised accounting topics before attempting timed objective practice.
Double Entry → Ledger → Trial Balance → Errors → Final Accounts → Adjustments → Depreciation → Ratios → Control Accounts → Manufacturing → Partnership → Non-Profit Accounts → MCQs