100% WAEC ANSWERS ON ACCOUNT APRIL 19th 2018

1a)

- It can result in a business exhausting the budget, leading to spending more than
what is coming in.

- Businesses may need to file for bankruptcy or shut their doors if they fail to keep adequate records from the
beginning.  

-It can result in problems with suppliers, payroll, utilities, and other vital components to a running successful business.

 1b)
- Relevance means an account information to make a difference in decision making
- Comparability means an account information can be used to compare different entities
- Consistency: information is consistently presented from year to year 
- Reliability means an account  information is verifiable, factual, and neutral

 1c
- Accounting information is historical in nature 
- there is no information as to usefulness, size or quantity because accounting is expressed in monetary terms

2ai)
Direct materials consist of all of the materials that become an integral part of the finished product. Direct materials should include the actual cost of the materials, as well as freight in, import duties, purchasing costs, receiving costs, storage costs and other directly attributable costs of acquiring the materials.
Example- Orange in fanta making
2aii)
Direct labor consists of all of the personnel costs required to manufacture the finished product. Direct labor should include wages, payroll taxes, and benefits associated with personnel who are integral to manufacturing the finished product.
Example- Wage of machine operator
2aiii)
Factory overhead consists of all of the other costs required to manufacture the finished product that do not fit into the direct material or direct labor elements. They consist mainly of indirect material, indirect labor, depreciation, utilities, rent, repairs and maintenance and insurance.
Example- Indirect wages.
2b)
i)RAW MATERIALS
These are the materials or goods purchased by the manufacturer. Manufacturing process is applied on the raw material to produce desired finished goods. 
ii)WORK-IN-PROGRESS (WIP) These are the partly processed raw materials lying on the
production floor. 
iii)FINISHED GOODS
These are the final products after manufacturing process
on raw materials. They are sold in the market.There are two kinds of manufacturing industries.
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