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JAMB Principles of Accounts 2024 Question 29

Question 29

Double Entry and the Ledger

Use the information below to answer questions 29 and 30.
July 1 – Started business with ₦10,500
July 31 – paid Agromachinex ₦6,000 owing them
The double entry for July 1 would be

  1. A.debit capital and credit cash
  2. B.credit cash and debit bank
  3. C.debit purchases and credit cash
  4. D.debit cash and credit capital
Show the answer and explanation

Answer: D (debit cash and credit capital)

Explanation

The owner brings cash into the business: cash (asset) is debited and capital is credited.