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WAEC Financial Accounting 2016 Question 11

Question 11

Final Accounts of a Sole Trader

Which of the following items of expense involves actual cash payment?

  1. A.Discounts allowed
  2. B.Provision for depreciation
  3. C.Carriage outwards
  4. D.Allowance for doubtful debts
Show the answer and explanation

Answer: C (Carriage outwards)

Explanation

Carriage outwards is paid in cash to transport goods to customers; the others are book entries with no cash paid.