WAEC Financial Accounting OBJ 2025
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📌 Typing in Progress…
✍️ WAEC Financial Accounting Essay 2025
📝 Instruction:
Answer all required questions. Below are the typed and improved answers with simple explanations and organized formatting.
🔹 Number 1 – Matching Accounting Terms & Club vs Company
Introduction:
In accounting, different types of organizations use different terms. For example, social clubs and companies don’t prepare accounts the same way, and some terms have different names based on the type of organization.
(1a) Matching Terms:
- Surplus — matches with Net profit
- Accumulated fund — matches with Capital
- Receipts and payments account — matches with Cash book
- Deficit — matches with Net loss
- Income and expenditure account — matches with Profit and loss account
(1b) Differences Between Social Club and Limited Liability Company:
(i) Purpose: Social clubs are non-profit and focus on member benefits, while companies aim to make profit.
(ii) Capital: Clubs have an accumulated fund; companies have capital from owners.
(iii) Surplus/Deficit vs Profit/Loss: Clubs report surplus/deficit; companies report net profit or loss.
(iv) Ownership: Clubs are owned by members; companies are owned by shareholders.
(v) Financial Statements: Clubs prepare income and expenditure accounts, companies prepare profit and loss accounts.
🔹 Number 2 – Purpose of Invoices and Ledger Classification
Introduction:
Invoices are very important documents in business transactions. Both sellers and buyers rely on them for records. Also, classifying ledgers helps businesses stay organized.
(2ai) For the Seller:
(i) Acts as proof of a sale transaction.
(ii) Serves as an invoice or request for payment.
(iii) Helps in stock and inventory tracking.
(2aii) For the Buyer:
(i) Serves as proof of purchase.
(ii) Helps in budgeting and financial planning.
(iii) Used for expense tracking and tax records.
(2b) Importance of Dividing Ledgers:
(i) Improved Organization – Easier to manage information.
(ii) Enhanced Accuracy – Reduces errors through categorization.
(iii) Better Analysis – Easier to analyze specific areas of business.
🔹 Number 3 – Government vs Private Sector Accounting
Introduction:
Financial reports are prepared differently depending on whether it’s a private company or a government entity. Their focus, users, and rules can vary.
(3) Key Differences:
(i) Purpose – Private companies focus on profit; governments focus on transparency and public service.
(ii) Reporting Standards – Companies use IFRS/GAAP; governments use IPSAS or public sector standards.
(iii) Users – Companies report to investors; governments report to citizens and agencies.
(iv) Focus – Companies care about profits; governments care about service delivery and fund usage.
(v) Accounting Basis – Companies often use accrual basis; governments may use cash or modified accrual basis.
🔹 Number 4 – Provisions in Final Accounts
Introduction:
In accounting, provisions are estimates for expected losses or expenses. They help businesses plan for things like bad debts or depreciation.
(4a) Increase in Provision for Doubtful Debts:
- Profit & Loss Account: Treated as an expense (debit).
- Balance Sheet: Added to old provision and deducted from debtors.
(4b) Decrease in Provision for Doubtful Debts:
- Profit & Loss Account: Treated as income (credit).
- Balance Sheet: Reduced from existing provision, increasing net debtors.
(4c) Provision for Discount on Debtors:
- Profit & Loss Account: Treated as an expense (debit).
- Balance Sheet: Deducted from debtor balance.
(4d) Provision for Discount on Creditors:
- Profit & Loss Account: Treated as a gain (credit).
- Balance Sheet: Deducted from creditor balance.
(4e) Provision for Depreciation:
- Profit & Loss Account: Treated as an expense (debit).
- Balance Sheet: Deducted from asset value to show net book value.
Financial accounting is more than just keeping records. It helps business and nonprofits track money, prepare for losses, and stay accountable. Understanding how terms, ledgers, and provisions work gives students the tools they need to handle real-world finances wisely. Whether it’s a club or a company, accounting ensures everything adds up.
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