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JAMB Principles of Accounts 2001 Question 45

Question 45

Departmental Accounts

Department F transferred some goods to department G at a selling price. The goods were not sold at the end of the accounting period. Which account is affected at the time of preparing a combined balance sheet?

  1. A.creditors
  2. B.debtors
  3. C.stock
  4. D.suspense.
Show the answer and explanation

Answer: C (stock)

Explanation

The unsold goods include unrealised profit, so the stock figure must be reduced in the combined balance sheet.