2013 - WAEC Accounting Past Questions and Answers - page 3

A minimum of two Persons is required to start a Partnership firm. A maximumnumber of 20 Partners are allowed in a Partnership firm. You require at least two persons to start a partnership firm.

 Liabilities, revenues and sales, gains, and owner equity and stockholders' equity accounts normally have credit balances.

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.

A partnership deed, also known as a partnershipagreement, is a document that outlines in detail the rights and responsibilities of all parties to a business operation. It has the force of law and is designed to guide the partners in the conduct of the business.

A low current ratio indicates problems in working capital management. All other things being equal, creditors consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which are due over the next 12 months.

Recurrent expenditure on goods and services is expenditure, which does not result in the creation or acquisition of fixed assets (new or second-hand). It consists mainly of expenditure on wages, salaries and supplements, purchases of goods and services and consumption of fixed capital (depreciation).

Administrative expenses are the expenses that an organization incurs not directly tied to a specific function such as manufacturing, production or sales. Theseexpenses are related to the organization as a whole as opposed to an individualdepartment. Expenses included in the profit and loss account are Selling and distribution expenses, Freight & carriage on sales, Sales tax, Administrative Expenses, Financial Expenses, Maintenance, depreciation and Provisions and more.

public accounts committee (PAC) Powerful parliamentary committee set up to examine reports from the Auditor General (or the National Audit Office), and to investigate if the money allocated by the parliament to various government agencies is spent as parliament intended.