passwella.
Menu

JAMB Principles of Accounts 2004 Question 36

Question 36

Branch Accounts

Discounts granted to branch customers are treated as a debit to branch

  1. A.stock account and a credit to branch debtors' account
  2. B.discount account and a credit to branch bank account
  3. C.stock account and a credit to branch bank account
  4. D.discount account and a credit to branch debtors' account
Show the answer and explanation

Answer: D (discount account and a credit to branch debtors' account)

Explanation

Discount allowed is an expense (debit discount account) and it reduces what the customer owes (credit branch debtors).