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WAEC Financial Accounting 1996 Question 36

Question 36

Double Entry and the Ledger

Which of the following accounts does not have a debit balance?

  1. A.Salaries Account
  2. B.Share Premium Account
  3. C.Advertisement Account
  4. D.Returns Inwards Account
  5. E.Rent and Rates Account.
Show the answer and explanation

Answer: B (Share Premium Account)

Explanation

Share premium is part of shareholders' funds (a capital reserve), so it has a credit balance; the others are expenses or returns inwards.