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JAMB Principles of Accounts 1994 Question 7

Question 7

Double Entry and the Ledger

What is the cardinal rule of the double entry system?

  1. A.Debit the increasing account and credit the decreasing account
  2. B.Debit the receiving account and credit the giving account
  3. C.Debit the asset account and credit the liability account
  4. D.Debit the revenue account and credit the expenditure account.
Show the answer and explanation

Answer: B (Debit the receiving account and credit the giving account)

Explanation

The basic double-entry rule is: debit the account that receives value and credit the account that gives value.