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JAMB Principles of Accounts 2004 Question 4

Question 4

Accounting Equation

The rule of accounting equation requires that account payable should be placed under

  1. A.liabilities
  2. B.equities
  3. C.assets
  4. D.capital
Show the answer and explanation

Answer: A (liabilities)

Explanation

Accounts payable are amounts owed to suppliers, so in Assets = Capital + Liabilities they are liabilities.