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JAMB Principles of Accounts 2006 Question 10

Question 10

Control Accounts

Tunde purchased goods from Femi by cash worth ₦1 000 with 10% cash discount. Tunde's purchases ledger control account is to be

  1. A.debited by ₦100
  2. B.credited by ₦100
  3. C.credited by ₦1 000
  4. D.debited by ₦1 000.
Show the answer and explanation

Answer: A (debited by ₦100)

Explanation

The 10% cash discount (₦100) is discount received; it reduces what is owed to creditors, so it is debited to the purchases ledger control account.