passwella.
Menu

WAEC Financial Accounting 2015 Question 10

Question 10

Double Entry and the Ledger

What is the ledger entry for the sale of plant and machinery on credit to Wilson?

  1. A.Credit Sales Account and debit Cash Account.
  2. B.Credit Plant and Machinery Account and debit Wilson's Account.
  3. C.Credit Sales Account and debit Wilson's Account.
  4. D.Credit Plant and Machinery Account and debit Cash Account.
Show the answer and explanation

Answer: B (Credit Plant and Machinery Account and debit Wilson's Account.)

Explanation

Selling a fixed asset reduces the asset account (credit); Wilson owes the money, so his account is debited.