2025 WAEC FINANCIAL ACCOUNTING: Financial Accounting (Account) WAEC Authentic Answers 2026 (2273)

(2ai)

(PICK ANY THREE)

(i) It shows proof that goods or services were sold.

(ii) It helps the seller know how much the buyer is to pay.

(iii) It is used to record sales in the seller’s account book.

(iv) It can serve as legal evidence in case of disputes.

(v) It helps the seller keep track of stock or goods sold.

(2aii)

(PICK ANY THREE)

(i) It shows proof that the buyer bought goods or services.

(ii) It tells the buyer how much to pay and when.

(iii) It helps the buyer to record the transaction in their books.

(iv) It helps the buyer to check if the prices and items are correct.

(v) It helps the buyer to plan and control spending.

(2b)

(PICK ANY THREE)

(i) Improved specialization: By dividing the ledger, different clerks can specialize in specific aspects of accounting such as debtors, creditors, or general accounts, thereby improving efficiency and accuracy.

(ii) Ease of reference: It becomes easier to locate and reference transactions since similar accounts are grouped together under their respective ledger classes.

(iii) Reduction of errors: Division of labour reduces the chances of errors because each section is handled by specialized personnel who become familiar with the routine.

(iv) Facilitates control and auditing: Dividing the ledger makes it easier to control and audit the records. 'copied from e x a m p l a z a s . c o m free' Each class can be checked independently without disrupting the entire system.

(v) Time-saving: It saves time during data entry and retrieval, as transactions are recorded in their appropriate ledgers without confusion or overcrowding.

(3)

(PICK ANY FIVE)

(i) In a private company, financial statements are prepared to know whether the business made a profit or a loss. But in the public sector, like a local government, the main goal is to show how public money was collected and used, focusing on accountability and service to the public.

(ii) The people who use financial statements in private companies include shareholders, investors, banks, and the management. In the public sector, the users are government officials, ministries, taxpayers, donor agencies, and the Auditor-General.

(iii) Private companies mostly use the accrual basis, they record income and expenses when they happen, not just when money is received or paid. Public sector bodies usually use the cash basis or a mix of cash and accrual (modified cash), where only cash transactions are recorded.

(iv) The financial statement of a private company includes documents like the Statement of Profit or Loss, Statement of Financial Position, and Cash Flow Statement. But in the public sector, it includes the Receipts and Payments Account, Statement of Revenue and Expenditure, and Statement of Assets and Liabilities.

(v) Private companies make money from selling goods and services. Their expenses include wages, rent, and other business costs. Public sector income comes from taxes, grants, and allocations, while expenses go into things like building roads, schools, 'copied from e x a m p l a z a s . c o m free' and health centres.

(vi) Private companies follow company law and accounting rules such as the International Financial Reporting Standards. Public sector accounts follow government rules like the Financial Memoranda, Treasury Circulars, and sometimes the International Public Sector Accounting Standards.

(vii) Private companies are audited by independent auditors who check the accuracy of the records for investors and owners. In the public sector, the financial statements are checked by the Auditor-General to ensure that public funds were properly used.

(4a) 

Increase in Provision for Doubtful Debts: 

This occurs when the estimated amount of debt that may not be recovered from customers increases compared to the previous provision. It is based on a percentage of debtors or past experience.

Treatment in Final Accounts:

(i) The increase is recorded as an expense in the Profit and Loss Account.

(ii) The total new provision is deducted from trade debtors in the Balance Sheet, under current assets.

(4b) 

Decrease in Provision for Doubtful Debts:  

This occurs when the estimated bad debts reduce at the end of the accounting period compared to the previous year’s provision.

Treatment in Final Accounts:

(i) The decrease is treated as an income in the Profit and Loss Accounts.

(ii) The new lower provision is deducted from debtors in the Balance Sheet.

(4c) 

Provision for Discount on Debtors: 

This is an estimate of the cash discount that a business expects to give to its customers for early payment of debts.

Treatment in Final Accounts:

(i) It is shown as an expense in the Profit and Loss Account.

(ii) It is deducted from the adjusted debtors (after deducting provision for doubtful debts) in the Balance Sheet.

(4d) 

Provision for Discount on Creditors:

This is an estimate of the cash discount the business expects to receive 'copied from e x a m p l a z a s . c o m free' from its suppliers for prompt payment.

Treatment in Final Accounts:

(i) It is recorded as an income in the Profit and Loss Account.

(ii) It is deducted from trade creditors in the Balance Sheet under current liabilities.

(4e) 

Provision for Depreciation:

This is an accounting estimate of the loss in value of a fixed asset due to wear and tear, usage, or obsolescence over time.

Treatment in Final Accounts:

(i) It is treated as an expense in the Profit and Loss Account.

(ii) It is deducted from the cost of the related fixed asset in the Balance Sheet to show the net book value of the asset.