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Goods were purchased for resale on credit costing ₦150,000 on 30th September 2008 from Tosanwumi...

Accounts - Principles of Accounts
JAMB 2019

Goods were purchased for resale on credit costing ₦150,000 on 30th September 2008 from Tosanwumi International. The entry to record these transaction is debit

  • A. Tosanwumi International, credit purchase Account
  • B. Purchase Account ₦150,000, credit Tosanwumi International Account ₦150,000
  • C. Credit Account ₦150,000, Credit Tosanwumi International ₦150,000
  • D. Tosanwumi International ₦150,000, credit credit Account ₦150,000
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Correct Answer: Option B
Explanation

When a purchase was made, a credit purchase invoice would have been issued by the supplier, Tosanwumi International, which would be signed by Mr. Roi as evidence of his acceptance of liability to pay for the goods.

The two accounts needed to record this transaction are the purchase Account and Tosanwumi International Account. purchase account would be debited while the Tosanwumi International Account credited.


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WAEC offline past questions - with all answers and explanations in one app - Download for free
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
WAEC offline past questions - with all answers and explanations in one app - Download for free
WAEC May/June 2024 - Practice for Objective & Theory - From 1988 till date, download app now - 99995
WAEC Past Questions, Objective & Theory, Study 100% offline, Download app now - 24709