WAEC FINANCIAL ACCOUNTING ANSWERS 2020 CONFIRMED
Here is the comprehesive answers to waec financial accounting 2020.
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The Business Financial Process
The accounting process involves recording, interpreting, classifying, analyzing, reporting and summarizing financial data.
Bookkeeping is the process of recording financial transactions. Recording financial transactions is the first part of and the foundation of the accounting process. Bookkeepers handle the recording part of the accounting process. Accountants handle all parts of the accounting process.
Bookkeepers record financial transactions in chronological order on a daily basis. Because accounting software automates many of the processes, some bookkeepers in small organizations also classify and summarize financial data in financial reports. These bookkeepers are often referred to as full-charge bookkeepers. They make higher salaries than bookkeepers but lower salaries than accountants.
Accountants analyze financial transactions in financial statements and business reports following accounting principles, standards and requirements. Accountants analyze and interpret financial data to report the financial condition and performance of the business to company leaders to help them make informed business decisions.
Bookkeeping and accounting can appear to be the same profession to the untrained eye. Both bookkeepers and accountants work with financial data. To enter either profession, you must have basic accounting knowledge.
Bookkeepers in smaller companies often handle more of the accounting process than simply recording transactions. They also classify and generate reports using the financial transactions.
They may not have the education required to handle these tasks, but this is possible because most accounting software automates reports and memorizes transactions making transaction classification easier. Sometimes, an accountant records the financial transactions for a company, handling the bookkeeping portion of the accounting process.
Fixed capital is conventionally defined as the stock of tangible, durable fixed assets owned or used by resident enterprises for more than one year. This includes plant, machinery, vehicles and equipment, installations and physical infrastructures, the value of land improvements, and buildings.
1) in a tabular form
Bookkeeping is mainly related to identifying, measuring, and recording, financial transactions
Accounting is the process of summarizing, interpreting, and communicating financial transactions which were classified in the ledger account
Management can’t take a decision based on the data provided by bookkeeping
Depending on the data provided by the accountants, the management can take critical business decisions
The objective of bookkeeping is to keep the records of all financial transactions proper and systematic
The objective of accounting is to gauge the financial situation and further communicate the information to the relevant authorities
Financial statements are not prepared as a part of this process
Financial statements are prepared during the accounting process
Bookkeeping doesn’t require any special skill sets
Accounting requires special skills due to its analytical and complex nature
The process of bookkeeping does not require any analysis
Accounting uses bookkeeping information to analyze and interpret the data and then compiles it into reports
Basically there are two types of bookkeeping – Single entry and double entry bookkeeping
The accounting department does preparations of a company’s budgets and plans loan proposals
Bookkeepers are required to be accurate in their work and knowledgeable about financial topics. Bookkeepers work is usually overseen by an accountant
Accountants with sufficient experience and education can obtain the title of Certified Public Accountant (CPA)
A nonprofit organization (NPO), also known as a non-business entity, is an organization traditionally dedicated to furthering a particular social cause or advocating a shared point of view.
In economic terms, it is an organization using the surplus of its revenues to further its objective, rather than distributing its income to the organization’s shareholders, leaders, or members.
(i)Training: Public accountants are trained in analysis, data collection, and testing, which allows them to look at accounts and see if the assumptions made are the correct ones. WHILE private accountants are trained more in process issues especially in terms of accounts payable and billing techniques.
(ii)Environment: A public accountant’s life is much more varied than that of a private one. WHILE private accountant you’re likely to be in your own office and not moving about, with regular hours to boot
(iii)Exposure: Public accountancy firm (such as the Big Four) expose you to a variety of different types of accountancy job within a whole host of industries. WHILE private accounting the jobs are within smaller firms who are not so well known, and the experiences gained are more niche
(iv)Stress: Public accountant is notoriously much more stressful than that of their private counterparts WHILE private accounting their industry, which is a regular day-to-day workforce and a steady stream of work.