NECO GCE FINANCIAL ACCOUNTING
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Questions below
NECO GCE FINANCIAL ACCOUNTING
solutions below
2023 NECO GCE FINANCIAL ACCOUNTING OBJ ANSWERS
1-10: EBECDBBCBD
11-20: ADDCBBCCAB
21-30: DEEAADCCDC
31-40: EEBBABCDDC
41-50: ADDAEEABEA
51-60: EBEDEECACC
THEORY ANSWERS
1.
(a) A control account is an account that summarizes the transactions in a subsidiary ledger. It represents the totals of the transactions in the subsidiary ledger and helps to ensure the accuracy of the ledger.
(b) Some uses of control accounts are:
– To check the accuracy of the subsidiary ledger by comparing the total of the control account with the total of the subsidiary ledger
– To detect errors and discrepancies in the subsidiary ledger
– To facilitate the preparation of financial statements by providing summarized information
– To monitor the activity in the subsidiary ledger and identify trends or patterns
– To assist in the reconciliation of bank accounts by using a bank control account
– To provide a framework for internal control and audit procedures.
2.
(a) Single entry is a method of bookkeeping where only one side of a transaction is recorded. It is mostly used by small businesses and individuals who do not require the complexity of double-entry bookkeeping.
(b) Five features of income and expenditure account are:
– It is a nominal account that represents the revenue and expenses of a business
– It is used to determine the net profit or loss of a business
– It is prepared at the end of an accounting period, usually one year
– It is used to calculate the income tax payable by a business
– It includes items such as sales, purchases, salaries, rent, and utilities.
(c) Five factors that cause depreciation of an asset are:
– Wear and tear due to usage or aging
– Obsolescence due to new technology or competition
– Natural disasters or accidents
– Changes in the market demand for the asset
– Misuse or neglect of the asset.
3.
(a) Three differences between private and public limited liability companies are:
– Private companies are owned by a small group of individuals and are not publicly traded, while public companies are owned by a large number of shareholders and are publicly traded.
– Private companies have less stringent regulatory requirements and are not required to disclose their financial information to the public, while public companies are subject to strict regulations and must disclose their financial information to the public.
– Private companies are usually smaller and have fewer shareholders, while public companies are larger and have more shareholders.
(b) Three types of capital are:
– Share capital, which is the capital contributed by the shareholders of a company
– Loan capital, which is the capital borrowed by a company from external sources such as banks or investors
– Working capital, which is the capital used to fund the day-to-day operations of a business.
(c) Five functions of the stock exchange market are:
– To facilitate the buying and selling of securities such as stocks, bonds, and derivatives
– To provide liquidity to investors by allowing them to easily buy and sell securities
– To set prices for securities based on supply and demand
– To provide a benchmark for the performance of the securities market
– To provide a platform for companies to raise capital through the issuance of securities.
4.
(a) Short notes on the following:
i. Consignee – The consignee is the person or company who receives goods from a consignor for the purpose of selling them on behalf of the consignor. The consignee does not own the goods until they are sold and is responsible for paying the consignor a commission on the sale.
ii. Consignor – The consignor is the person or company who sends goods to a consignee for the purpose of selling them on their behalf. The consignor retains ownership of the goods until they are sold and is entitled to receive a commission on the sale.
iii. Consignment outwards – Consignment outwards is the process of sending goods from a business to a consignee for the purpose of selling them on behalf of the business.
iv. Del credere commission – Del credere commission is an additional commission paid by the consignor to the consignee as a type of insurance against bad debts. The consignee assumes the risk of non-payment by the buyer.
v. Account sales – Account sales is a document prepared by a consignee to show the details of goods sold, the price received, and the commission due to the consignor.
(b) Five source documents are:
– Invoices
– Receipts
– Purchase orders
– Delivery notes
– Bank statements.
