WAEC Accounting Past Questions & Answers - Page 285

1,421.

The method that provides a reliable check upon cash and stock at the branch and discloses the gross profit in the account is

A.

Cost plus percentage

B.

Cost price

C.

Average cost

D.

Selling price

Correct answer is A

No explanation has been provided for this answer.

1,422.

The realization concept states that

A.

Revenue is recognized as being earned when ownership of goods passes to the customer

B.

Revenue and profit should not be anticipated

C.

Similar way from one accounting period to another

D.

Transaction must be expressed in monetary term

Correct answer is D

The realization principle is the concept that revenue can only be recognized once the underlying goods or services associated with the revenue have been delivered or rendered, respectively. Thus, revenue can only be recognized after it has been earned. Advance payment for goods. 

1,423.

The accounting principle that states that insignificant expenditures are not to be taken into account is the

A.

Realization concept

B.

Materiality convention

C.

Marching concept

D.

Consistency convention

Correct answer is B

This accounting convention proposed that while accounting, only those transactions which have material impact on financial status of the organization will be considered and other transactions which have insignificant effect will be ignored. It gives relative importance to an item or event.