NECO Financial Accounting Answer/Question (Obj & Essay) – 2020 Expo


NECO FINANCIAL ACCOUNTING Questions Answers 2020 Objective and Theory Update.


F/Accounting Theory:

(i)Time lag between writing a cheque and the payment appearing on the bank statement (unpresented cheques)

(ii)Time lag between depositing amounts into the bank account and these appearing on the bank statement (unrecorded lodgements)

(iii)Direct debits and standing orders are not yet recorded in the cash account (or cash book)

(iv)Bank charges not recorded in the cash account (or cash book)

(v)Errors, such as transposition errors, or casting errors in the cash account (or cash book)

(vi)Errors made by the bank on the bank statement

(a)Changing sources
(b) Intergovernmental transfers
(c)Owns source revenue
(d) Long-term revenue growth
(e) Data Sources
(f) Crude oil
(h) Education
(i) Tax
(J) Agriculture

-[pick any five]
(vii)tax authorities.


(i)Enable Average Balance Processing for
Specified Sets of Books.
(ii)Capture Average Balances.
(iii)Effective-Date Transaction Processing.
(iv)Transaction Calendar Control.
(v)Control Transaction Balancing by Effective

(i)Marketing expenses
(ii)Discounts on the issue
of shares

(i)Opening stock.
(ii)Purchase and purchase return.
(iii)Purchase related expenses.
(iv)Factory or manufacturing expenses.
(v)Sales and sales return

(i)Active/Managing Partner .
(ii)Sleeping Partner .

(i)Active/Managing Partner: An active partner mainly takes part in the day-to-day running of the business and also takes active participation in the conduct and management of the business firm.

(ii)sleeping partner; is also known as a “dormant partner”. This partner does not participate in the day-to-day functioning activities of the partnership firm. A person who has sufficient money or interest in the firm, but cannot devote his time to the business, can act as a sleeping partner in the firm.


Returns inwards; this are goods returned to the selling entity by the customer, such as for warranty claims or outright returns of goods for a credit. For the customer, this results in the following accounting transaction. A debit (reduction) of accounts payable.

Returns outwards; this are goods returned by the customer to the supplier. For the supplier, this results in the following accounting transaction. A debit (reduction) in revenue in the amount credited back to the customer.

prospectus; in finance is a disclosure document that describes a financial security for potential buyers. It commonly provides investors with material information about mutual funds , stocks, bonds and other investments, such as a description of the company’s business, financial statements , biographies of officers and directors, detailed information about their compensation, any litigation that is taking place, a list of material properties and any other material information.

Prepayments; this are amounts paid for by a business in advance of the goods or services being received later on. Any payment made in advance can be considered a prepayment. A prepayment is not dissimilar to a deposit, but generally falls under a more set time period for fulfillment of the goods or service purchased.

Cost of goods sold is the carrying value of goods sold during a particular period. Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out, or average cost.


A joint venture (JV) is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.

-[Pick any five]
(i) Accruals concept
(ii) Conservatism concept.
(iii) Consistency concept.
(iv) Economic entity concept.
(v)Going concern concept.
(vi)Matching concept.
(vii)Materiality concept.

-[pick any five]
(a) Individual result of each department can be known which helps to compare the performances among 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 departments.

(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.

(f) For additions or alterations of various departments, departmental accounts helps a lot as it supplies the necessary information.

(g) As detailed information about the firm is available from departmental accounting the users of accounting information, particularly, the auditors and investors



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