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WAEC Financial Accounting 2018 Question 28

Question 28

Manufacturing Accounts

In a manufacturing account, royalties paid is

  1. A.debited to the trading account.
  2. B.credited to the profit and loss account.
  3. C.credited to the manufacturing account.
  4. D.debited to the manufacturing account.
Show the answer and explanation

Answer: D (debited to the manufacturing account.)

Explanation

Royalties are a direct expense, debited in the manufacturing account (prime cost).