Test Index

WAEC Accounting 2010 Paper

Question : 7

Total: 44

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

Balance in Purchases account at 5/1/08 is

Solution:

Concept:

Purchases account records the total cost of goods bought for resale, whether paid in cash or on credit.

Explanation:

Capital introduced is not a purchase, so it is ignored.

Cash purchase of goods on

\frac{2}{1}/08

10,000

Sale of fixtures on

\frac{3}{1}/08

is not a purchase.

Sale of goods on credit to Lagbaja is income, not a purchase.

Credit purchase of goods from Tamedu on

\frac{5}{1}/08

8,000

Therefore, the purchases account balance = cash purchases + credit purchases.

This becomes

10,000 + 8,000 = 18,000

Answer:

₦18,000

Option B.

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