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WAEC Financial Accounting 2021 Question 36

Question 36

Control Accounts

Use the following information to answer questions 36 and 37.
Creditors (01/01/19): ₦223,000
Creditors (31/12/19): ₦316,000
Credit purchases: ₦1,426,000
Discount received: ₦64,000
Company's cheque dishonoured: ₦90,000
Payment to creditors is

  1. A.₦1,423,000
  2. B.₦1,359,000
  3. C.₦1,333,000
  4. D.₦1,295,000.
Show the answer and explanation

Answer: B (₦1,359,000)

Explanation

Payments = 223,000 + 1,426,000 + 90,000 (dishonoured cheque restores the debt) − 64,000 − 316,000 = ₦1,359,000.