Test Index

WAEC Accounting 2019 Paper

Question : 28

Total: 45

Interest on drawings amounted to

Solution:

Concept:

Interest on drawings is computed as total drawings multiplied by the rate and the relevant time fraction.

Explanation:

Monthly drawings are

\text{NGN}1{,}500

Total annual drawings

= \text{N}1{,}500 \times 12 = \text{N}18{,}000

Drawings are assumed to be made evenly, so the average period is 6 months, i.e.

\frac{6}{12}

of the year.

Interest is charged at

10\%

per annum.

Thus, interest on drawings

= \mathrm{N}18{,}000 \times \frac{10}{100} \times \frac{6}{12} = \mathrm{N}900

Answer:

C. 900

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