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JAMB Principles of Accounts 2004 Question 6

Question 6

Cash Book

Use the information below to answer questions 5 and 6.
Cash Book
Dr: Capital ₦6,600; Sales ₦3,000; Debtors ₦2,500
Cr: Purchases ₦3,500; Stationery ₦1,300; Wages ₦2,700
The owner wishes to maintain an amount equal to ⅓ of capital as drawings.
The cash book closing balance will be

  1. A.₦900
  2. B.₦2,400
  3. C.₦4,200
  4. D.₦4,600
Show the answer and explanation

Answer: B (₦2,400)

Explanation

Receipts = 6,600 + 3,000 + 2,500 = ₦12,100. Payments = 3,500 + 1,300 + 2,700 + drawings 2,200 = ₦9,700. Balance = 12,100 − 9,700 = ₦2,400.