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WAEC Financial Accounting 2012 Question 48

Question 48

Accounting Equation

Use the following information to answer questions 47 and 48.
Cash in hand: D1,440
Cash at Bank: D2,440
Stock: D2,500
Furniture and fittings: D2,200
Creditors: D1,000
The liability is

  1. A.D7,580.
  2. B.D6,580.
  3. C.D5,380.
  4. D.D1,000.
Show the answer and explanation

Answer: D (D1,000.)

Explanation

The only amount owed to outsiders is creditors, D1,000.