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JAMB Principles of Accounts 1995 Question 5

Question 5

Accounting Equation

Given: Motor van, ₦3 600; Premises, ₦5 000; Loan from R. Nwaeke, ₦1 000; Cash at bank; ₦1 650; Stock of goods, ₦4 800; Creditors, ₦2 560; Cash in hand, ₦250 and Debtors, ₦6 910. Calculate the capital figure.

  1. A.₦19 650
  2. B.₦18 650
  3. C.₦17 850
  4. D.₦16 850.
Show the answer and explanation

Answer: B (₦18 650)

Explanation

Assets = 3 600 + 5 000 + 1 650 + 4 800 + 250 + 6 910 = ₦22 210. Liabilities = loan 1 000 + creditors 2 560 = ₦3 560. Capital = 22 210 − 3 560 = ₦18 650.