NECO GCE 2025 F/ACCOUNTING QUESTIONS

NECO GCE 2025 F/ACCOUNTING QUESTIONS

NECO GCE 2025 F/ACCOUNTING QUESTIONS BELOW

NECO GCE 2025 F/ACCOUNTING SOLUTIONS BELOW

NECO GCE 2025 FINANCIAL ACCOUNTING ANSWERS

F/account Obj
1-10 EDABCBCCBC
10-20 DDECDDBECC
21-30 ADBCABEECD
31-40 ACCBBCEECA
41-50 BDEACCDBBA

THEORY
*NECO GCE FINANCIAL ACCOUNTING*

(1a)
(PICK ANY THREE)
(i) Gross Profit: This is the difference between the net sales and the cost of goods sold before deducting operating expenses. It shows the profit made directly from trading activities and indicates how efficiently the business is buying and selling goods.

(ii) Net Profit: This is the final profit after all expenses have been deducted from the gross profit. It reflects the actual profit made by the business during a period and is transferred to the capital account.

(iii) Cost of Goods Sold: This refers to the total cost of goods that were sold during a period. It includes opening stock plus purchases and carriage inwards minus closing stock. It helps determine the gross profit of the business.

(iv) Accrued Expenses: These are expenses that have been incurred during the accounting period but have not yet been paid. They are added to the expenses in the profit and loss account and shown as liabilities in the balance sheet.

(v) Prepaid Expenses: These are expenses that have been paid for in advance but relate to a future accounting period. They are deducted from expenses in the profit and loss account and shown as assets in the balance sheet.

(1b)
(PICK ANY SEVEN)
(i) Rates
(ii) Taxes
(iii) Fines and fees
(iv) Licences
(v) Grants from State Government
(vi) Grants from Federal Government
(vii) Earnings from commercial ventures
(viii) Loans
(ix) Rents from property

*NECO GCE FINANCIAL ACCOUNTING*

(2a)
(PICK ANY ONE)
A partnership is a type of business owned and managed by two or more persons who agree to carry on a lawful business with the aim of making profit and sharing the profits and losses.

OR

A partnership is a voluntary association of individuals who pool their resources together to establish and operate a business, sharing the risks, responsibilities, profits, and losses according to their agreement.

(2b)
(PICK ANY THREE)
(i) Work-in-Progress (WIP): Work-in-progress refers to the total value of all incomplete contract activities at the end of an accounting period. It includes the cost of materials used, labour employed, overheads incurred, work certified, and work uncertified. WIP helps determine the level of completion of a contract and the amount to be included in the financial statements.

(ii) Retention Money: Retention money is the portion of the contract price withheld by the contractee to ensure that the contractor completes the project satisfactorily and to specification. It acts as a safeguard against defects, poor workmanship or incomplete finishing. The contractor receives the retention money only after fulfilling all contract conditions, usually after the maintenance period.

(iii) Work Certified: Work certified is the value of work completed on a contract and officially approved by an architect, engineer, or project surveyor. It serves as the basis for calculating the amount payable to the contractor during the project. Work certified shows the recognised progress on a contract and helps determine notional profit and interim payments.

(iv) Work Uncertified: Work uncertified represents the value of work completed by the contractor but not yet inspected or approved by the project consultant at the end of the accounting period. Although the work is done, it cannot be recognised as certified income. The valuation is usually based on cost only and treated as part of work-in-progress.

(v) Notional Profit: Notional profit is the difference between the value of work-in-progress (including work certified and uncertified) and the accumulated cost incurred on an incomplete contract. It is not a final profit but a temporary measure used to determine how much profit should be transferred to the Profit and Loss Account, based on the contract’s stage of completion.

(2c)
(PICK ANY TWO)
(i) Wear and tear
(ii) Passage of time
(iii) Obsolescence
(iv) Frequent
(v) Accidents

*NECO GCE FINANCIAL ACCOUNTING*

(3a)
(PICK ANY FIVE)
(i) Capital contribution of each partner
(ii) Profit and loss sharing ratio
(iii) Duties, roles, and responsibilities of each partner
(iv) Admission of new partners
(v) Rules guiding withdrawal or retirement of partners
(vi) Method of valuation of goodwill
(vii) Procedures for dissolution of the partnership

(3b)
(PICK ANY ONE)
A journal is the primary book of original entry where all financial transactions are first recorded systematically in chronological order before being posted to the ledger.

OR

A journal is the accounting record used to enter transactions as they occur, showing details such as the date, accounts involved, amounts debited and credited, and a narration.

(3c)
(i) Goodwill:
(PICK ANY ONE)
Goodwill is the intangible value of a business arising from its reputation, loyal customers, efficient management, and other advantages that make the business worth more than the value of its net assets.

OR

Goodwill is the additional value a business commands due to non-physical factors such as brand name, customer loyalty, favourable location, and business efficiency, which enable it to earn higher profits.

(ii) Drawings:
(PICK ANY ONE)
Drawings refer to cash or goods taken by the owner or partners from the business for personal use. Such withdrawals reduce the owner’s capital and are recorded separately to monitor personal use of business resources.

OR

Drawings are the personal withdrawals of money or items from a business by its owner or partners. They represent a reduction in the business’s equity and must be accounted for to determine the correct closing capital.

(iii) Active Partner:
(PICK ANY ONE)
An active partner is a partner who participates fully in the day-to-day operations and management of the business, contributing both capital and labour. They are involved in decision-making and share profits and losses.

OR

An active partner is one who takes part in the routine running of the business, offering managerial skills and effort in addition to their financial investment. Such partners are openly known to the public as part of the firm.

*NECO GCE FINANCIAL ACCOUNTING*

(4a)
DIFFERENCES:
(PICK ANY TWO)
(i) Subscription in advance refers to payment made by members before it becomes due, while subscription in arrears is payment not yet made after it becomes due.

(ii) Subscription in advance appears as a liability in the balance sheet, while subscription in arrears appears as an asset.

(iii) Subscription in advance reduces the current year’s income, while subscription in arrears increases the current year’s income.

(iv) Subscription in advance is linked to future accounting periods, while subscription in arrears relates to past accounting periods.

SIMILARITY:
(PICK ANY ONE)
Both are adjustments made in the final accounts of non-profit organizations.

OR

Both affect the subscription figure shown in the income and expenditure account.

(4b)
(i) Memorandum of Association:
(PICK ANY ONE)
The Memorandum of Association is the foundational document that outlines the external constitution of a company. It defines the company’s name, location, objectives, liability of members, and share capital. It serves as the company’s charter and limits the scope of operations the company is legally permitted to undertake.

OR

The Memorandum of Association is the legal document that establishes the company’s identity and sets the boundaries within which it must operate. It states the objectives for which the company is formed and provides important details such as liability clauses, capital structure, and the relationship with the outside world.

(ii) Articles of Association:
(PICK ANY ONE)
The Articles of Association contain the internal rules and regulations governing the management of a company. They outline how directors are appointed, how meetings are conducted, the rights of shareholders, and the procedures for handling company affairs. It serves as the internal guidebook for running the business.

OR

The Articles of Association detail the internal operations and administrative framework of a company. They specify voting rights, dividend policies, procedures for transfer of shares, directors’ duties, and internal control systems. The articles ensure orderly management and smooth internal functioning of the company.

(iii) Certificate of Incorporation:
(PICK ANY ONE)
The Certificate of Incorporation is the legal document issued by the Corporate Affairs Commission (CAC) to signify that a company has been duly registered. It gives the company a separate legal identity, enabling it to own property, enter contracts, and sue or be sued in its own name.

OR

The Certificate of Incorporation is the official confirmation that a company has fulfilled all registration requirements under the law. It marks the company’s birth as a legal entity, granting it perpetual succession and the authority to carry on business as a recognized corporate body.

SECTION B