Akirika bought a motor van for his business by cash. The entries are to debit

Assessment: JAMB UTME - Principles of Accounts - 2012 Subject: Financial Accounting

Question 1 Report

Akirika bought a motor van for his business by cash. The entries are to debit
Answer Details
The correct entry would be "motor van and credit cash." This means that the account for "motor van" is debited (increased) and the account for "cash" is credited (decreased) to reflect the purchase of the motor van using cash. In simple terms, when Akirika buys a motor van for his business using cash, the amount of cash he has decreases and the value of his assets (represented by the motor van) increases. Therefore, the accounts involved in the transaction are "motor van" and "cash." The account for "motor van" is debited to reflect the increase in assets, while the account for "cash" is credited to reflect the decrease in cash.
Read lesson note on Cashbook (JAMB)
Read lesson note on The Accounting Equation And Double Entry Principle (WAEC)
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