passwella.
Menu

WAEC Financial Accounting 1994 Question 44

Question 44

Double Entry and the Ledger

John brought in an additional plant into his business. What are the accounting entries necessary to reflect the transaction?

  1. A.Debit Plant Account, credit Current Account
  2. B.Debit Current Account, credit Plant Account.
  3. C.Credit Plant Account, credit Profit and Loss Account
  4. D.Debit Profit and Loss Account, Credit Plant Account
  5. E.Debit Plant Account, credit Capital Account.
Show the answer and explanation

Answer: E (Debit Plant Account, credit Capital Account.)

Explanation

The business gains an asset (debit plant) and owes the owner more capital (credit capital).