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JAMB Principles of Accounts 2012 Question 28

Question 28

Manufacturing Accounts

In manufacturing accounts, finance expenses are charged to the

  1. A.departmental account
  2. B.trading account
  3. C.profit and loss account
  4. D.balance sheet.
Show the answer and explanation

Answer: C (profit and loss account)

Explanation

Finance costs such as interest are not production costs; they go to the profit and loss account.