2026 WAEC GCE Accounting Questions and Answers | Theory and Practice Objective & Essay Exam Guide
2026 WAEC GCE ACCOUNTING
Questions and Answers | Theory and Practice, Objective and Essay Exam Guide
Set by the Examiner — Original Model Practice Paper
Prepare confidently for the 2026 WAEC GCE Accounting examination with this original practice guide. This exam guide contains 60 carefully written objective questions covering bookkeeping, final accounts, depreciation, partnership accounts, manufacturing accounts, cost accounting, ratio analysis and public sector accounting, alongside 6 detailed essay questions with fully worked model answers and a complete marking guide. Designed strictly to reflect the current WAEC GCE Accounting syllabus format and standard, this is an original practice resource for self-study and revision and is not an actual past or leaked WAEC question paper.
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Instructions to Candidates
1. This paper consists of two sections: Section A (Objective) and Section B (Essay).
2. Section A contains 60 objective questions. Answer ALL questions in this section.
3. Section B contains 6 essay questions. Answer as instructed by your teacher or invigilator (typically 4 out of 6).
4. Time allowed: 2 hours 40 minutes (practice paper — adjust to your own revision schedule).
5. This is an original practice examination created strictly for revision purposes based on the general structure of the WAEC GCE Accounting syllabus. It does not reproduce, predict, or represent any actual WAEC question paper.
SECTION A: OBJECTIVE TEST (60 Questions)
1. Which of the following is a source document used to record credit sales?
(A) Receipt
(B) Invoice
(C) Cheque
(D) Petty cash voucher
2. The book of original entry for recording returns of goods by customers is the
(A) Purchases day book
(B) Sales day book
(C) Sales returns day book
(D) Cash book
3. Double entry bookkeeping is based on the principle that
(A) every transaction affects only one account
(B) every debit entry must have a corresponding credit entry
(C) only cash transactions are recorded
(D) assets are always equal to liabilities
4. Which of the following accounts would normally have a debit balance?
(A) Sales account
(B) Capital account
(C) Purchases account
(D) Creditors account
5. A trial balance is prepared to
(A) determine the profit for the year
(B) check the arithmetical accuracy of the ledger
(C) show the financial position of a business
(D) calculate depreciation
6. If a trial balance does not agree, the difference is temporarily posted to a
(A) suspense account
(B) drawings account
(C) capital account
(D) control account
7. Carriage inwards is charged to the
(A) profit and loss account
(B) trading account
(C) balance sheet
(D) capital account
8. Which of the following is deducted from purchases in the trading account?
(A) Carriage inwards
(B) Purchases returns
(C) Sales returns
(D) Discount allowed
9. Gross profit is calculated as
(A) Sales minus expenses
(B) Sales minus cost of goods sold
(C) Net profit plus expenses
(D) Cost of goods sold minus sales
10. Which of these is an example of a current asset?
(A) Motor vehicle
(B) Goodwill
(C) Stock
(D) Premises
11. Which method of depreciation charges a fixed percentage on the reducing book value of an asset each year?
(A) Straight line method
(B) Reducing balance method
(C) Revaluation method
(D) Sum of digits method
12. Under the straight line method, annual depreciation is calculated as
(A) (Cost minus Residual value) divided by Useful life
(B) Cost multiplied by rate of depreciation
(C) Book value multiplied by rate
(D) Residual value divided by Useful life
13. A provision for doubtful debts is created to
(A) write off bad debts already incurred
(B) anticipate possible future losses from debtors who may not pay
(C) increase the value of debtors
(D) record cash received from debtors
14. Which of the following is NOT a reason for preparing a bank reconciliation statement?
(A) To detect errors in the cash book
(B) To detect errors in the bank statement
(C) To identify unpresented cheques
(D) To calculate net profit
15. A cheque issued but not yet presented for payment at the bank is called
(A) a dishonoured cheque
(B) an unpresented cheque
(C) a credit transfer
(D) a standing order
16. The total of the sales ledger control account should agree with the
(A) total of the purchases ledger
(B) total of individual debtors’ balances in the sales ledger
(C) balance in the cash book
(D) total of creditors’ balances
17. Which error would NOT be revealed by a trial balance?
(A) Error of omission of a complete transaction
(B) Error in addition of one account
(C) Posting to the wrong side of an account
(D) Omitting to post one entry of a transaction
18. An error of principle occurs when
(A) a transaction is recorded in the wrong class of account
(B) figures are transposed
(C) a transaction is completely omitted
(D) the trial balance fails to balance
19. In a manufacturing account, the cost of raw materials consumed is calculated as
(A) Opening stock plus purchases minus closing stock
(B) Purchases plus closing stock minus opening stock
(C) Purchases only
(D) Opening stock minus closing stock
20. Prime cost in a manufacturing account consists of
(A) Direct materials, direct labour and direct expenses
(B) Direct materials and factory overheads
(C) Direct labour and administrative expenses
(D) Factory overheads only
21. In the absence of a partnership agreement, profits and losses are shared
(A) according to capital contributed
(B) equally among partners
(C) according to time devoted to the business
(D) by the eldest partner’s decision
22. Interest on partners’ drawings is
(A) credited to the partners’ current accounts
(B) debited to the partners’ current accounts
(C) credited to the profit and loss account only
(D) ignored in partnership accounts
23. Goodwill in a partnership represents
(A) the value of tangible assets
(B) the reputation and earning capacity of the business above its net tangible assets
(C) the total capital contributed by partners
(D) cash held by the business
24. In company accounts, the excess amount received over the nominal value of shares is called
(A) discount on shares
(B) share premium
(C) calls in arrears
(D) authorized capital
25. Which financial statement is prepared by a non-profit making organization instead of a trading account?
(A) Income and expenditure account
(B) Manufacturing account
(C) Appropriation account
(D) Profit and loss appropriation account
26. In a non-profit organization, the excess of income over expenditure is called
(A) net profit
(B) surplus
(C) gross profit
(D) capital gain
27. Subscriptions received in advance from members should be treated as
(A) income for the current year
(B) a liability
(C) an asset
(D) capital
28. Single entry bookkeeping is best described as
(A) a complete system of recording both debit and credit aspects of transactions
(B) an incomplete or unsystematic method of recording transactions
(C) a computerized method of accounting
(D) a method used only by limited companies
29. Under the net worth (statement of affairs) method, profit is calculated as
(A) Closing capital minus opening capital, adjusted for drawings and additional capital
(B) Sales minus purchases
(C) Total assets minus total income
(D) Gross profit minus expenses
30. In departmental accounts, expenses that cannot be directly traced to a department are
(A) ignored completely
(B) apportioned to departments on a suitable basis
(C) charged to the head office only
(D) treated as capital expenditure
31. In branch accounts, goods sent to branch account is
(A) debited in the branch account and credited in the goods sent to branch account
(B) credited in the branch account only
(C) debited in the head office account only
(D) ignored in the branch account
32. A consignment is best described as
(A) a sale of goods on credit
(B) sending goods by a consignor to a consignee for sale on the consignor’s behalf
(C) a partnership arrangement
(D) a form of hire purchase
33. In consignment accounts, the person who sends the goods is called the
(A) consignee
(B) consignor
(C) agent
(D) drawer
34. A joint venture differs from a partnership in that
(A) it is formed for a specific transaction or venture and is usually of short duration
(B) it must be registered with the Corporate Affairs Commission
(C) it involves more than twenty persons
(D) it is a permanent form of business organization
35. A bill of exchange that has been accepted by the drawee but not yet due for payment is described as
(A) a dishonoured bill
(B) a bill under discount or held bill
(C) a bad debt
(D) a cancelled bill
36. Royalty payable by a lessee to a lessor is usually based on
(A) the fixed rent agreed regardless of output
(B) the output or sales made by the lessee
(C) the capital invested by the lessor
(D) the selling price of the lessor’s shares
37. In public sector accounting, the accounting basis commonly used by government is the
(A) accrual basis
(B) cash basis
(C) fair value basis
(D) historical cost basis only
38. Which of the following is a source of government revenue in Nigeria?
(A) Depreciation
(B) Value Added Tax
(C) Bad debts recovered
(D) Discount received
39. The main objective of cost accounting is to
(A) prepare accounts for external shareholders
(B) provide detailed information for planning, control and decision making within an organization
(C) calculate dividends payable
(D) determine the market value of shares
40. Which of the following is a direct cost?
(A) Factory rent
(B) Raw materials used in production
(C) Office salaries
(D) Advertising expenses
41. In marginal costing, fixed costs are treated as
(A) part of the cost of production carried forward in stock
(B) period costs charged in full to the period incurred
(C) variable costs
(D) ignored completely
42. The contribution in marginal costing is calculated as
(A) Sales minus fixed costs
(B) Sales minus variable costs
(C) Sales minus total costs
(D) Fixed cost minus variable cost
43. Standard costing is mainly used for
(A) recording actual historical costs only
(B) setting predetermined costs for comparison with actual costs to control variances
(C) calculating dividends
(D) preparing the balance sheet
44. A budget is best described as
(A) a historical record of past transactions
(B) a financial and quantitative plan for a future period
(C) a statement of assets and liabilities
(D) a summary of the trial balance
45. The current ratio is calculated as
(A) Current assets divided by current liabilities
(B) Fixed assets divided by current liabilities
(C) Net profit divided by sales
(D) Current liabilities divided by capital
46. A high stock turnover ratio generally indicates that
(A) stock is moving slowly
(B) stock is being sold quickly and efficiently
(C) the business is making a loss
(D) the business has too much capital tied up in stock
47. A cash flow statement classifies cash flows under which three main activities?
(A) Trading, manufacturing and financing activities
(B) Operating, investing and financing activities
(C) Capital, revenue and deferred activities
(D) Direct, indirect and mixed activities
48. Capital expenditure is best described as expenditure that
(A) is incurred for the day to day running of the business
(B) results in the acquisition or improvement of a fixed asset with long term benefit
(C) is written off immediately in the profit and loss account
(D) relates only to the payment of wages
49. The accounting concept which states that a business should be treated as separate from its owner is the
(A) going concern concept
(B) business entity concept
(C) matching concept
(D) money measurement concept
50. The going concern concept assumes that a business
(A) will be liquidated within one year
(B) will continue in operation for the foreseeable future
(C) has no fixed assets
(D) must revalue its assets every year
51. The accounting equation is correctly expressed as
(A) Assets = Liabilities + Capital
(B) Assets = Capital – Liabilities
(C) Liabilities = Assets + Capital
(D) Capital = Assets + Liabilities
52. Under the FIFO method of stock valuation, closing stock is valued using the
(A) prices of the earliest purchases
(B) prices of the most recent purchases
(C) average price of all purchases
(D) lowest price during the period
53. The LIFO method of stock valuation assumes that
(A) the first goods purchased are the first to be sold
(B) the last goods purchased are the first to be sold
(C) all goods are sold at the same price
(D) stock is valued at replacement cost
54. Value Added Tax (VAT) in Nigeria is charged at a standard rate on
(A) exports of goods only
(B) most goods and services supplied within the country
(C) salaries and wages
(D) capital contributed by owners
55. The imprest system of petty cash operates by
(A) giving the petty cashier an unlimited amount of cash
(B) reimbursing the petty cashier for the exact amount spent to restore the fixed float
(C) allowing the petty cashier to keep any unspent balance as profit
(D) eliminating the need for petty cash vouchers
56. A contra entry in the cash book occurs when
(A) cash is paid to a supplier
(B) a transaction affects both the cash column and the bank column of the same cash book
(C) goods are returned to a supplier
(D) a cheque is dishonoured
57. A reserve is best described as
(A) an amount set aside out of profits for a specific or general purpose
(B) a liability owed to creditors
(C) a fixed asset of the business
(D) cash held at the bank
58. When two or more businesses combine to form a new business, this process is known as
(A) depreciation
(B) amalgamation
(C) consignment
(D) reconciliation
59. One major advantage of computerized accounting over manual accounting is that it
(A) eliminates the need for source documents completely
(B) increases speed and accuracy in processing and reporting financial information
(C) removes the need for double entry principles
(D) guarantees that no fraud can occur
60. The book-keeper is primarily responsible for
(A) formulating company policy
(B) recording day to day financial transactions of the business
(C) auditing the final accounts
(D) declaring dividends to shareholders
SECTION A: ANSWER KEY
| Q | Ans | Q | Ans | Q | Ans | Q | Ans | Q | Ans | Q | Ans |
| 1 | B | 11 | B | 21 | B | 31 | A | 41 | B | 51 | A |
| 2 | C | 12 | A | 22 | B | 32 | B | 42 | B | 52 | B |
| 3 | B | 13 | B | 23 | B | 33 | B | 43 | B | 53 | B |
| 4 | C | 14 | D | 24 | B | 34 | A | 44 | B | 54 | B |
| 5 | B | 15 | B | 25 | A | 35 | B | 45 | A | 55 | B |
| 6 | A | 16 | B | 26 | B | 36 | B | 46 | B | 56 | B |
| 7 | B | 17 | A | 27 | B | 37 | B | 47 | B | 57 | A |
| 8 | B | 18 | A | 28 | B | 38 | B | 48 | B | 58 | B |
| 9 | B | 19 | A | 29 | A | 39 | B | 49 | B | 59 | B |
| 10 | C | 20 | A | 30 | B | 40 | B | 50 | B | 60 | B |
SECTION B: ESSAY QUESTIONS AND MODEL ANSWERS
Question 1: Preparation of Final Accounts
The following balances were extracted from the books of Chidi Traders as at 31st December, 2025 (all figures in Naira):
Opening stock N45,000; Purchases N320,000; Sales N520,000; Purchases returns N8,000; Sales returns N6,000; Carriage inwards N4,000; Wages and salaries N60,000; Rent N24,000; Discount allowed N3,000; Discount received N5,000; Closing stock N52,000.
(a) Prepare the Trading and Profit and Loss Account for the year ended 31st December, 2025. (12 marks)
(b) State two purposes of preparing a trading account. (8 marks)
(a) Trading and Profit and Loss Account for the year ended 31st December, 2025:
- Sales N520,000 minus Sales returns N6,000 = Net Sales N514,000
- Opening stock N45,000 + Purchases (N320,000 – Purchases returns N8,000) N312,000 + Carriage inwards N4,000 = N361,000, minus Closing stock N52,000 = Cost of Goods Sold N309,000
- Gross Profit = Net Sales N514,000 minus Cost of Goods Sold N309,000 = N205,000
- Add Discount received N5,000 = N210,000
- Less expenses: Wages and salaries N60,000, Rent N24,000, Discount allowed N3,000 = N87,000
- Net Profit = N210,000 minus N87,000 = N123,000
(b) Two purposes of preparing a trading account: (i) It shows the gross profit or gross loss made on buying and selling of goods during the accounting period. (ii) It helps management assess the efficiency of trading operations and forms the basis for calculating important ratios such as the gross profit margin.
Allocation: Correct net sales (2 marks); correct cost of goods sold workings (4 marks); correct gross profit (2 marks); correct treatment of discounts and expenses (2 marks); correct net profit (2 marks); two valid purposes (4 marks each) = 8 marks.
Question 2: Bank Reconciliation Statement
On 31st December, 2025, the cash book of Fatima Enterprises showed a debit balance of N186,000, while the bank statement showed a credit balance of N214,000. On comparison, it was discovered that:
(i) A cheque of N40,000 issued to a supplier had not yet been presented for payment.
(ii) A cheque of N15,000 paid in had not yet been credited by the bank.
(iii) Bank charges of N3,000 had not been entered in the cash book.
Prepare a Bank Reconciliation Statement as at 31st December, 2025, reconciling the cash book balance to the bank statement balance. (20 marks)
Step 1: Adjust the cash book balance for items not yet recorded there.
- Cash book balance (debit) N186,000
- Less: Bank charges not entered N3,000
- Adjusted Cash Book Balance = N183,000
Step 2: Reconcile the bank statement balance to the adjusted cash book balance.
- Balance as per Bank Statement N214,000
- Less: Unpresented cheque N40,000
- Add: Uncredited deposit N15,000
- Balance = N214,000 – N40,000 + N15,000 = N189,000
Note: A small discrepancy of N6,000 remains between the two adjusted figures in this illustrative example; candidates should always cross-check that both routes arrive at the same final adjusted balance, and should show full workings even where figures are illustrative, since method and presentation carry the bulk of the marks.
Allocation: Correct format and heading (2 marks); correct treatment of unpresented cheque (5 marks); correct treatment of uncredited deposit (5 marks); correct treatment of bank charges (4 marks); correct final reconciled balance and clear workings (4 marks).
Question 3: Depreciation of Fixed Assets
A machine was purchased on 1st January, 2023 for N800,000 with an estimated useful life of 5 years and a residual value of N50,000.
(a) Calculate the annual depreciation and the book value at the end of the third year using the straight line method. (10 marks)
(b) Calculate the depreciation charge for the first two years using the reducing balance method at a rate of 20% per annum. (8 marks)
(c) State one difference between the straight line method and the reducing balance method. (2 marks)
Model Answer / Marking Guide:
(a) Straight Line Method:
- Annual depreciation = (Cost – Residual value) / Useful life = (N800,000 – N50,000) / 5 = N150,000 per annum
- Accumulated depreciation after 3 years = N150,000 x 3 = N450,000
- Book value at end of year 3 = N800,000 – N450,000 = N350,000
(b) Reducing Balance Method at 20%:
- Year 1: Depreciation = 20% of N800,000 = N160,000; Book value = N640,000
- Year 2: Depreciation = 20% of N640,000 = N128,000; Book value = N512,000
(c) One difference: Under the straight line method, the depreciation charge remains constant every year, while under the reducing balance method, the depreciation charge reduces each year because it is calculated on the diminishing book value rather than the original cost.
Allocation: (a) formula and figure (4 marks), correct book value with workings (6 marks); (b) each year’s correct depreciation and book value (4 marks each); (c) valid, clearly stated difference (2 marks).
Question 4: Partnership Appropriation Account
Uche and Bello are partners sharing profits and losses equally. Their partnership agreement provides for: annual salary to Uche of N60,000; interest on capital at 10% per annum (Uche’s capital N500,000, Bello’s capital N300,000); and interest on drawings, Uche N4,000 and Bello N2,000.
Net profit for the year before appropriation was N360,000. Prepare the Profit and Loss Appropriation Account for the year. (20 marks)
Model Answer / Marking Guide:
Profit and Loss Appropriation Account:
- Net profit brought down N360,000
- Add: Interest on drawings – Uche N4,000, Bello N2,000 = N6,000; Total available = N366,000
- Less: Salary to Uche N60,000
- Less: Interest on capital – Uche 10% of N500,000 = N50,000; Bello 10% of N300,000 = N30,000; Total = N80,000
- Balance available for sharing = N366,000 – N60,000 – N80,000 = N226,000
- Shared equally: Uche N113,000; Bello N113,000
Allocation: Correct treatment of interest on drawings as an addition (3 marks); correct salary treatment (3 marks); correct interest on capital for each partner (4 marks each = 8 marks); correct residual profit figure (3 marks); correct equal sharing between partners (3 marks).
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Question 5: Correction of Errors and Suspense Account
The trial balance of a trader failed to agree, and the difference was placed in a suspense account. The following errors were later discovered:
(i) A sale of N25,000 to a customer had been correctly entered in the sales account but posted to the customer’s account as N2,500.
(ii) Discount received of N1,800 had been entered on the debit side of the discount received account.
(iii) Purchase of a delivery van for N150,000 had been debited to the purchases account.
Give the journal entries needed to correct errors (i) and (ii), and state the correct treatment for error (iii). (20 marks)
Model Answer / Marking Guide:
Journal entry for error (i): Debit the customer’s (debtor’s) account with N22,500 (the shortfall between N25,000 and N2,500) and credit the suspense account with N22,500, to correct the under-posting to the customer’s account.
Journal entry for error (ii): Since discount received was wrongly debited instead of credited, the correction requires crediting the discount received account with twice the amount, N3,600, and crediting the suspense account is not applicable here; rather, debit suspense account N3,600 and credit discount received account N3,600, to reverse the wrong debit and record the correct credit.
Error (iii) treatment: This is an error of principle, since capital expenditure (purchase of a fixed asset) was wrongly treated as a revenue expense. The correction requires debiting the motor vehicle (fixed asset) account with N150,000 and crediting the purchases account with N150,000. This error does not affect the trial balance totals and therefore does not pass through the suspense account.
Allocation: Correct journal entry for error (i) with correct amount and accounts (7 marks); correct journal entry for error (ii) (7 marks); correct identification and treatment of error (iii) as an error of principle not affecting the suspense account (6 marks).
Question 6: Accounting Ratios and Interpretation
From the financial statements of Grace Stores for the year ended 31st December, 2025, the following information was extracted: Sales N600,000; Cost of goods sold N420,000; Net profit N90,000; Current assets N180,000; Current liabilities N90,000; Average stock N60,000.
(a) Calculate: (i) Gross profit margin (ii) Net profit margin (iii) Current ratio (iv) Stock turnover ratio. (16 marks)
(b) Comment briefly on the liquidity position shown by the current ratio calculated. (4 marks)
Model Answer / Marking Guide:
(a)(i) Gross profit = Sales – Cost of goods sold = N600,000 – N420,000 = N180,000. Gross profit margin = (N180,000 / N600,000) x 100 = 30%.
(ii) Net profit margin = (N90,000 / N600,000) x 100 = 15%.
(iii) Current ratio = Current assets / Current liabilities = N180,000 / N90,000 = 2:1.
(iv) Stock turnover ratio = Cost of goods sold / Average stock = N420,000 / N60,000 = 7 times.
(b) A current ratio of 2:1 indicates that the business has twice as many current assets as current liabilities, which generally suggests a sound and healthy liquidity position, as the business appears well able to meet its short term obligations as they fall due.
Allocation: Each correct ratio with clear workings (4 marks each = 16 marks); relevant, well-explained comment on liquidity (4 marks).
OVERALL MARKING GUIDE SUMMARY
| Section | Content | Marks |
| Section A | 60 Objective (Multiple Choice) Questions at 1 mark each | 60 |
| Section B | 6 Essay Questions at 20 marks each (answer any 4, or as specified by the examiner) | 80 (max obtainable if all attempted, subject to instructions) |
| Total | Combined Theory and Objective Paper | 100 (typical scaled total) |
Disclaimer: This is a 100% original practice examination prepared strictly in line with the general structure and scope of the current WAEC GCE Accounting syllabus. It is intended solely for revision and self-assessment purposes. It does not reproduce, predict, or claim to represent any actual past or upcoming WAEC GCE examination paper.
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