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JAMB Principles of Accounts 2008 Question 7

Question 7

Final Accounts of a Sole Trader

Use the information below:
I. Cash at bank
II. Cash in hand
III. Premises
IV. Land
V. Creditors
VI. Loan from friends/bank
Determine the fixed assets

  1. A.I and V
  2. B.II and IV
  3. C.II and VI
  4. D.III and IV
Show the answer and explanation

Answer: D (III and IV)

Explanation

Premises and land are kept for long-term use in the business, so they are fixed assets.