passwella.
Menu

JAMB Principles of Accounts 1998 Question 45

Question 45

Departmental Accounts

Which of the following entries is effected by a department when goods are charged to it at selling prices?

  1. A.stock account is debited
  2. B.purchases account is debited
  3. C.stock account is credited
  4. D.mark-up account is debited.
Show the answer and explanation

Answer: B (purchases account is debited)

Explanation

The receiving department records the goods charged to it in its purchases account (debit).