2019 WAEC GCE FINANCIAL ACCOUNT ANSWERS
i) Direct Allocation:- Overheads are directly allocated to various departments on the basis of expenses for each department respectively. Examples are: overtime premium of workers engaged in a particular department, power (when separate meters are available), jobbing repairs etc.
ii) Direct Labour/Machine Hours:- Under this basis, the overhead expenses are distributed to various departments in the ratio of total number of labour or machine hours worked in each department. Majority of general overhead items are apportioned on this basis.
iii) Value of Materials Passing through Cost Centres:- This basis is adopted for expenses associated with material such as material handling expenses.
iv) Direct Wages:- According to this basis, expenses are distributed amongst the departments in the ratio of direct wages bills of the various departments. This method is used only for those items of expenses which are booked with the amounts of wages, e.g., workers’ insurance, their contribution to provident fund, workers’ compensation etc.
v) Number of Workers:- The total number of workers working in each department is taken as a basis for apportioning overhead expenses amongst departments. Where the expenditure depends more on the number of employees than on wages bill or number of labour hours, this method is used. This method is used for the apportionment of certain expenses as welfare and recreation expenses, medical expenses, time keeping, supervision etc.
a) Individual result of each department can be
known which helps to compare the performancesamong all the departments, i.e the trading results can be compared.
b) Departmental accounts help to understand or
locate the success, failure, rates of profit, etc.
c) It helps the management to make proper
plan of action, policies in order to increase profit
after analysing the results of operation of various
d) Departmental accounting helps us to understand which department should be expanded further or which one should be closed
down as per the results of the operation.
e) If also helps to encourage a healthy
competitive spirit among the various departments which, ultimately, helps to increase profits of the firm as a whole.
3a) Single entry accounting system records each accounting transaction with a single entry to the accounting records, rather than the vastly more widespread double entry system. The single entry system is centered on the results of business that are reported in the income statement.
i)improper knowledge:- The mechanism of keeping incomplete records is due to improper knowledge of accounting principles.
ii) Inexpensive:- This method is less expensive as compared to keeping records as per double entry system.
iii)Time Saving:- This method is time saving in the sense that only a few records are maintained under such system.
iv) Convenient:- This method is very convenient in the sense that no rules and principles are to be followed.
v) Highly Flexible:- This mechanism is not based on any set rules, principles and accounting standards, as such it can be modified and changed as per the need and availability of time.
vi) Convenient:- This method is very convenient in the sense that no rules and principles are to be followed.
4ai) partnership is an arrangement where parties, known as business partners, agree to cooperate to advance their mutual interests.
4aii) partnership deed is a document that outlines in detail the rights and responsibilities of all parties to a business operation. In other words It has the force of law and is designed to guide the partners in the conduct of the business.
i)The name of the firm
ii)Name and details of all partners
iii)Date of commencement of business
iv)Duration of the firm’s existence
v)Capital contributed by each partner