JAMB UTME - Principles of Accounts - 2012

Question 1 Report

Ibrahim, a micro business operator, sold 10 bags of sugar to Jide at a total cost of #12,000.

The record in Jide's book would be to debit

purchases #12,000 and credit Ibrahim #12,000

purchases #12,000 and credit sugar account #12,000

Jide #12,000 and credit purchases

Ibrahim #12,000 and sugar account #12,000

Answer Details

The record in Jide's book would be to "purchases #12,000 and credit Ibrahim #12,000." This is because Jide purchased 10 bags of sugar from Ibrahim, which means Jide incurred a cost of #12,000 for the goods purchased. Therefore, Jide needs to record this transaction as a purchase of goods, which is an expense. To record the expense, Jide needs to debit the "Purchases" account, which represents the cost of the goods purchased. At the same time, Jide needs to credit Ibrahim's account for the same amount, which represents the payment made to the supplier. In summary, Jide's book should show a debit of #12,000 to Purchases and a credit of #12,000 to Ibrahim.

Read lesson note on Ethics In Accounting (JAMB)

Read lesson note on Nature And Significance Of Accounting (JAMB)

rading, Profit and Loss Account (Extract)
	Dept	X
	₦	₦
Net sales
Less cost of goods sold		3,000
Stock 1/1	200
Purchases	1,000
Cost of goods available for sale	1,200
Less stock 31/12	400
Cost of goods sold		800

₦		₦
Stock 1/1	20,000	Net sales	370,000
Add purchases	250,000
Cost of goods available for sale	270,000
Less stock 31/12	40,000
Cost of goods sold			230,000
Rent expenses	35,000

Date	Particulars	Folio	Details	Total
1/6/02	2 bags of maize	SL	1,800	1,800
12/6/02	3 bags of salt
	less 5% discount		7,000	7,000
				8,800

Cash Book (Extract)
	₦		₦
Balance b/f	2,200	Sundry expenses	16,800
		Drawings	4,700
Receipt from customers	16,400	Suppliers	7,300

Cash Book
	₦		₦
Capital	2,600	Purchases	15,000
Sales	28,200	Rent	1,250
		Motor vehicle	7,600






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