WAEC Accounting 2015 Paper

Concept:Stolen goods are treated as a loss caused by theft or fraud, so they are recorded in a special Defalcations Account.Explanation:When goods are stolen at the branch, the branch stock is reduced.Therefore, the Branch Stock Account is credited to remove the stolen goods from the stock records.The corresponding debit entry is made in the Defalcations Account.A Defalcations Account is opened to record the loss of money or goods through theft, misappropriation, or fraud by an employee or other official.If the loss is later recovered from the employee or from insurance, the Defalcations Account is credited.If the loss cannot be recovered, the balance in the Defalcations Account is transferred to the Profit and Loss Account.The stolen goods are not debited to Branch Stock Account, Branch Adjustment Account, or Branch Debtors Account.Answer:A. Defalcations account.