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JAMB Principles of Accounts 2012 Question 10

Question 10

Cash Book

In a three-column cash book, dishonoured cheques will be shown on the

  1. A.bank column (debit)
  2. B.bank column (credit)
  3. C.cash column (debit)
  4. D.cash column (credit).
Show the answer and explanation

Answer: B (bank column (credit))

Explanation

The cheque was first debited in the bank column when banked; when it bounces, the money is taken back out by crediting the bank column.