Nwoye buys stock and pays by cheque. The entries in the books of Nwoye is Debit

Assessment: WAEC SSCE - Financial Accounting - 2016 (Objective) Subject: Financial Accounting

Question 1 Report

Nwoye buys stock and pays by cheque. The entries in the books of Nwoye is Debit

Answer Details
When Nwoye buys stock and pays by cheque, the entry in his books will be "Purchases; Credit bank". Here's why: - Purchases: This is the account that records the cost of the stock that Nwoye has purchased. - Credit bank: This account is credited because Nwoye paid for the stock using a cheque. When a payment is made by cheque, it is first recorded in the bank account and then transferred to the relevant account. In this case, the payment will be transferred from the bank account to the purchases account. To summarize, when Nwoye buys stock and pays by cheque, the purchases account is debited to reflect the cost of the stock purchased, while the bank account is credited to reflect the payment made by Nwoye. Therefore, the entry in Nwoye's books is "Purchases; Credit bank".
Read lesson note on Nature And Significance Of Accounting (JAMB)
Read lesson note on Principles Of Double Entry (JAMB)
View Answer

Related Questions

1

Which of the following are impersonal accounts ? I. Investment II. Creditors III. Premises IV. Debtors V. Salaries
2

Cash paid to jake, N2,500 was entered on the credit side of his account and debited to cash account. This is an error of
3

A petty cash account has an imprest of GH¢ 6,000. If GH¢ 2,000 were left, how much will be re-imbursed at the end of the period?
4

One of the purchases invoices of Mr.Dauda showed D96,240 less 12 \(\frac{1}{2}\)% trade discount and cash discount of 20%. Since Mr Dauda paid the amount due...
5

External users of accounting information include
6

A bank statement shows an overdraft of GH¢ 190,000. Kofi a debtor paid GH¢ 400,000 into the account. The new balance is
7

Every asset should have
8

Which of the following errors are errors of commission? I. A cheque paid to Adam debited to Adam's account. II. Credit sales to Eva credited to sales account...

Download The App On Google Playstore

Everything you need to excel in your exams

Green Bridge CBT Mobile App
Personalized AI Learning Chat Assistant
200,000+ Exam Questions Across IGCSE, JAMB, WAEC & NECO
Over 3,900 Lesson Notes
Offline Support - Learn Anytime, Anywhere
Green Bridge Timetable
Literature Summaries & Potential Questions
Track Your Performance & Progress
In-depth Explanations for Comprehensive Learning