Test Index

WAEC Accounting 2010 Paper

Question : 6

Total: 44

Jan. 1	N
$\text{1 / 1 / 08}$ Capital introduced by cash	50,000
$\text{2 / 1 / 08}$ Bought goods for retail by cash	10,000
$\text{3 / 1 / 08}$ Sold fixtures by cash	5,000
$\text{4 / 1 / 08}$ Sold goods to Lagbaja on credit	3,000
$\text{5 / 1 / 08}$ Bought goods on credit from Tamedu	8,000

Cash balance at 5/1/08 is

Solution:

Concept:

Cash balance is found by considering only transactions that actually involve cash. Credit transactions are ignored.

Explanation:

Start with the capital introduced by cash:

+50,000

Cash purchase of goods:

-10,000

Cash sale of fixtures:

+5,000

Credit sale to Lagbaja and credit purchase from Tamedu do not affect cash.

Therefore, cash balance

= 50,000 - 10,000 + 5,000 = 45,000

Answer:

Cash balance at

5/1/08

\#45,000

Correct option: C.

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