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JAMB Principles of Accounts 2012 Question 6

Question 6

Double Entry and the Ledger

Akirika bought a motor van for his business by cash. The entries are to debit

  1. A.motor van and credit Akirika
  2. B.sales and credit Akirika
  3. C.motor van and credit cash
  4. D.cash and credit motor van.
Show the answer and explanation

Answer: C (motor van and credit cash)

Explanation

The motor van (an asset) comes in, so it is debited; cash goes out, so cash is credited.