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JAMB Principles of Accounts 2008 Question 9

Question 9

Cash Book

Given:
Cash Book
Debit: Capital ₦65 000; Sales ₦30 000
Credit: Purchases ₦12 250; Rent ₦9 100; Motor vehicle ₦2 400
Find the bank balance.

  1. A.N71 250 credit
  2. B.N71 250 debit
  3. C.N95 000 credit
  4. D.N95 000 debit
Show the answer and explanation

Answer: B (N71 250 debit)

Explanation

Receipts 65 000 + 30 000 = ₦95 000; payments 12 250 + 9 100 + 2 400 = ₦23 750. Balance = ₦71 250, and since receipts are larger it is a debit balance.