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WAEC Financial Accounting 1997 Question 8

Question 8

Control Accounts

Creditors Control Account
Dr: Bank "X"; Discount N30; Balance c/d N450
Cr: Balance b/d N1,200; "Y" N1,800
The balance of N450 in the above account represents

  1. A.Trading Account item
  2. B.Profit and Loss Account item
  3. C.current asset
  4. D.current liability
  5. E.provision for discount on creditors
Show the answer and explanation

Answer: D (current liability)

Explanation

The balance carried down on the creditors control is money owed to suppliers, a current liability.