Financial Accounting WASSCE (PC), 2017/h3>

Section A: Theory of Financial Accounting

Question 1

 

Question not available

Observation

 

Candidates’ performance in this question which was on errors and accounting terminologies were below average. Some of the expected responses were:

(a)(i) Trade discount:It is a reduction in the catalogue price of goods in order to encourage buyers to buy in large quantities.

(ii)  Cash discount: It is a reduction in the invoice price of goods to encourage prompt payment.   

(iii)Bad debts:  These are debts which are deemed irrecoverable.                                          
(iv) Provision for doubtful debts: These are estimates of the debts at a point in time which arenot likely to be recovered.

(v)Bad debts recovered:These are debts previously written-off but which have subsequently been retrieved or paid by the debtors.

(b)  Errors that do not affect the agreement of the trial balance are:

  1. Error of omission;
  2. Error of original entry;
  3. Error of commission;
  4. Error of principle;
  5. Complete reversal of entries;
  6. Error of compensation/compensating error;
  7. Error of transposition/transposition error;
  8. Error of duplication.