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JAMB Principles of Accounts 1998 Question 50

Question 50

Public Sector Accounting

If a monthly insurance premium is remitted to a company by the state government, the initial deductions from employees are recorded in

  1. A.the general fund
  2. B.agency fund
  3. C.special fund
  4. D.general long-term fund.
Show the answer and explanation

Answer: B (agency fund)

Explanation

Money deducted from staff and held for an outside party is recorded in an agency fund.