2026 WAEC ACCOUNTING ANSWER

ACCOUNTING
1-10: DDCACAACCA
11-20: BCCCDBBBBB
21-30: BCCACACDBC
31-40: CBAADBCDBD
41-50: BCCDADCDDB


(1a)
(PICK ANY ONE)
Bank Reconciliation Statement: A Bank Reconciliation Statement is a statement prepared periodically to reconcile the balance shown in the bank column of the cash book with the balance shown in the bank statement. It identifies and explains the causes of differences between the two balances, such as unpresented cheques, uncredited lodgements, bank charges, and direct credits. Its purpose is to ensure the accuracy of the bank records and determine the correct bank balance.

OR

Bank Reconciliation Statement: The statement is known as a Bank Reconciliation Statement. It is a statement prepared by a business to compare the bank balance in the cash book with the balance shown by the bank statement and to account for any differences between them. It helps to detect errors, omissions, and outstanding transactions and ensures that both records agree.

(1b)
(PICK ANY FOUR)
(i) Unpresented Cheques: These are cheques issued by the business and recorded in the cash book but have not yet been presented to the bank for payment. Therefore, they appear in the cash book but not in the bank statement.

(ii) Uncredited Lodgements: These are deposits made by the business and entered in the cash book, but the bank has not yet processed and credited them. As a result, they appear in the cash book but not in the bank statement.

(iii) Bank Charges and Commission: The bank may deduct charges, commission, or service fees directly from the account without the immediate knowledge of the business. These deductions appear in the bank statement but may not yet be entered in the cash book.

(iv) Direct Credits or Standing Orders: Customers may pay money directly into the firm's bank account, or the bank may make payments through standing orders on behalf of the business. Such transactions may appear in the bank statement before they are recorded in the cash book, thereby causing differences between the two records.

(v) Dishonoured Cheques: These are cheques deposited into the bank and recorded in the cash book but later returned unpaid by the bank. The amount is deducted from the account by the bank, causing a difference between the cash book and bank statement.

(vi) Direct Debits: The bank may make payments on behalf of the business for items such as insurance premiums, electricity bills, or loan repayments. These payments appear in the bank statement before they are recorded in the cash book.

(vii) Errors in the Cash Book: Mistakes such as omission of entries, wrong amounts entered, overcasting, undercasting, or posting entries to the wrong side of the cash book can lead to discrepancies between the cash book and bank statement.

(viii) Errors Made by the Bank: The bank may mistakenly debit or credit the account with the wrong amount or omit a transaction. Such errors cause differences between the bank statement and the cash book until they are corrected.

(ix) Cheques Paid Directly into the Bank by Customers: Customers may pay money directly into the business account without notifying the business. The bank records the transaction immediately, but it may not yet appear in the cash book.

=============================

(2a)
(PICK ANY ONE)
Accounting Ratio: Accounting ratio is a relationship between two or more accounting figures expressed mathematically to evaluate the financial performance, profitability, liquidity, efficiency and overall viability of a business. It helps users of financial statements in making informed economic decisions.

OR

Accounting Ratio: Accounting ratio is a financial analysis tool used to compare one accounting figure with another in order to assess the financial strength, operating efficiency, profitability and liquidity of a business. It enables managers, investors and other users of financial statements to evaluate the performance of a business and make sound decisions.

(2b)
(i) Liquidity Ratios
(ii) Profitability Ratios
(iii) Efficiency (Activity) Ratios

(2c)
(PICK ANY FIVE)
(i) It is based on historical data and may not reflect the current financial position of the business.

(ii) Differences in accounting policies and methods used by firms may make comparisons misleading.

(iii) Ratios do not consider changes in price levels caused by inflation.

(iv) They cannot reveal all aspects of a firm's performance and should not be used alone for decision-making.

(v) Ratios may be distorted if the financial statements contain errors or are manipulated.

(vi) They do not explain the reasons for good or poor performance; they only indicate trends.

(vii) Seasonal fluctuations in business activities may affect the reliability of ratios.

(viii) Lack of a standard benchmark may make interpretation difficult.

(ix) Ratios are quantitative and ignore qualitative factors such as management efficiency and employee morale.

(x) Different firms may operate under different conditions, making inter-firm comparison difficult.

============================

(3)
(PICK ONE EXPLANATION FOR EACH)
(i) Business Entity Concept: This concept states that the business is treated as a separate entity from its owner. The financial transactions of the owner are kept separate from those of the business. Therefore, only transactions relating to the business are recorded in the books of accounts.

OR

Business Entity Concept: The business entity concept states that a business is regarded as a distinct unit separate from its owner. As a result, the personal transactions, assets and liabilities of the owner are not mixed with those of the business. Only business transactions are recorded in the accounting records.

(ii) Going Concern Concept: This concept assumes that the business will continue to operate for the foreseeable future and will not be liquidated or closed down soon. Assets are therefore valued at cost less depreciation rather than at their disposal or break-up values.

OR

Going Concern Concept: The going concern concept assumes that a business will continue its operations indefinitely and has no intention of winding up in the near future. This assumption allows assets to be recorded and depreciated over their useful lives rather than being valued at their immediate selling prices.

(iii) Realization Concept: This concept states that revenue is recognized and recorded only when it has been earned, that is, when goods have been sold or services rendered, regardless of whether cash has been received or not.

OR

Realization Concept: The realization concept provides that income is recognized only when it is earned through the sale of goods or the provision of services. Revenue is therefore recorded when ownership or services have been transferred to customers, whether payment has been received or not.

(iv) Materiality Concept: This concept requires that only information and items that are significant enough to influence the decisions of users of financial statements should be disclosed separately. Insignificant items may be treated in a simpler manner.

OR

Materiality Concept: The materiality concept holds that all items which are important enough to affect the judgement or decisions of users of financial statements should be disclosed. Trivial or insignificant items may not require detailed treatment because they do not materially affect the accounts.

(v) Consistency Concept: This concept requires that the same accounting methods, principles and procedures should be applied from one accounting period to another. This ensures uniformity and makes comparison of financial statements over different periods easier and more meaningful.

OR

Consistency Concept: The consistency concept requires an enterprise to use the same accounting policies and methods from one accounting period to another. This enables meaningful comparison of financial results and financial position over different years and enhances the reliability of financial statements.

=============================

(4a)
(PICK ONE ONLY)
(i) Heating and Lighting: Apportioned on the basis of floor area occupied by each department because departments occupying larger spaces are likely to consume more heat and light.
(ii) Advertisement: Apportioned on the basis of sales revenue or turnover of each department since departments generating higher sales benefit more from advertising activities.
(iii) Canteen Expenses: Apportioned on the basis of the number of employees in each department because the canteen facilities are mainly used by staff members.
(iv) Depreciation of Building: Apportioned on the basis of floor area occupied by each department, as the building is used according to the space occupied.
(v) Insurance of Premises: Apportioned on the basis of floor area occupied or value of assets insured in each department because the insurance coverage relates to the premises and assets used by the departments.

(4b)
(PICK FIVE ONLY)
(i) Determination of Departmental Profitability: Departmental accounting enables the business to ascertain the profit or loss made by each department separately. This helps management to identify profitable departments and those that are underperforming, thereby facilitating better decision-making.

(ii) Effective Performance Evaluation: The system provides a basis for measuring the efficiency and effectiveness of each department. By comparing departmental results, management can assess whether departmental managers are achieving their targets and responsibilities.

(iii) Improved Managerial Control: Departmental accounting strengthens management control by making it easier to monitor revenues, expenses, and profits of individual departments. Any inefficiencies, wastage, or excessive costs can be detected and corrected promptly.

(iv) Facilitates Resource Allocation: The information generated from departmental accounts assists management in allocating resources such as capital, labour, and equipment more effectively. Resources can be directed towards departments that offer the highest returns.

(v) Assists in Planning and Budgeting: Departmental accounting provides detailed financial information for each department, making it easier to prepare budgets, forecasts, and operational plans. Management can set realistic targets based on past departmental performance.

(vi) Supports Expansion and Investment Decisions: By showing the performance of individual departments, departmental accounting helps management decide whether to expand, reorganize, merge, or discontinue a department. Investment decisions can therefore be made on a sound basis.

(vii) Encourages Healthy Competition: When departmental results are reported separately, managers and staff become more conscious of their performance. This often creates healthy competition among departments, leading to greater efficiency and productivity.

(viii) Facilitates Comparison of Departmental Results: Departmental accounting allows comparisons between departments within the same organization and across different accounting periods. Such comparisons help management identify strengths, weaknesses, trends, and areas requiring improvement.

============================

(5)


============================

(6)



============================

(7)



============================

(8)


============================

(9)