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GCE Financial Accounting 1990 Question 23

Question 23

Trial Balance

The Trial Balance will show returns outwards account ₦60, discount allowed account ₦100, respectively as

  1. A.₦60 credit, ₦100 credit
  2. B.₦60 credit; ₦100 debit
  3. C.₦60 debit, ₦100 debit
  4. D.₦61 debit, ₦100 credit.
  5. E.₦160 credit, ₦60 credit.
Show the answer and explanation

Answer: B (₦60 credit; ₦100 debit)

Explanation

Returns outwards reduce purchases (credit balance); discount allowed is an expense (debit balance).