Question on: JAMB Accounting - 2019
Goods were purchased for resale on credit costing ₦150,000 on 30th September 20X8 from Tosanwumi International. The entry to record these transaction is debit
Tosanwumi International, credit purchase Account
Purchase Account ₦150,000, credit Tosanwumi International Account ₦150,000
Credit Account ₦150,000, Credit Tosanwumi International ₦150,000
Tosanwumi International ₦150,000, credit credit Account ₦150,000
We can assume that a credit purchase invoice was issued by the supplier, Tosanwumi International, which would be signed by Mr. Roi as evidence of his acceptance of liability to pay for the goods.
Hence, the two accounts needed to record this transaction are purchase account and Tosanwumi Account. This involves having the purchase account debited while the Tosanwumi International Account credited.
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