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JAMB Principles of Accounts 2010 Question 28

Question 28

Manufacturing Accounts

The depreciation on a motor vehicle that is being used for manufacturing and administration is charged to the

  1. A.debit side of manufacturing and profit and loss account
  2. B.debit side of profit and loss account only
  3. C.credit side of profit and loss account only
  4. D.debit side of manufacturing and balance sheet.
Show the answer and explanation

Answer: A (debit side of manufacturing and profit and loss account)

Explanation

The factory share is a manufacturing overhead and the office share is an administrative expense, so both accounts are debited.