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WAEC Financial Accounting 2006 Question 9

Question 9

Public Sector Accounting

The basis of accounting which eliminates debtors and creditors is

  1. A.cash basis
  2. B.accrual basis
  3. C.fund basis
  4. D.commitment basis.
Show the answer and explanation

Answer: A (cash basis)

Explanation

On a cash basis only cash received and paid is recorded, so there are no debtors or creditors.