Prof. Bush had two accounts with Olive Brother agreed to have only one balance outstanding. By which of the following methods could this be effected?
Answer Details
The method that could be used to consolidate the two accounts of Prof. Bush with Olive Brother is a contra entry.
A contra entry is a bookkeeping entry that offsets or cancels out an existing account balance. It is used when there are two accounts with opposite balances that need to be consolidated into one. In this case, since Prof. Bush has two accounts with Olive Brother, a contra entry could be used to consolidate the two balances into one.
The contra entry involves transferring the balance of one account to the other account, effectively canceling out the balance of the first account. For example, if Prof. Bush has an outstanding balance of N10,000 in Account A and a balance of N8,000 in Account B, a contra entry can be made by transferring N8,000 from Account B to Account A, leaving a single balance of N18,000 in Account A.
To summarize, a contra entry could be used to consolidate the two accounts of Prof. Bush with Olive Brother by transferring the balance of one account to the other account, effectively canceling out the balance of the first account. This would result in only one outstanding balance for Prof. Bush with Olive Brother.