JAMB Accounting 2014 Objective — Question 46

Question 46 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2014 Objective paper, with the correct answer and a full explanation.

N800,000 worth of ordinary shares of 50k were issued at #1 each, payable in full on application. The entry in the cash book would be to

A. credit N1,600,000
B. debit N1,600,000Correct
C. credit N800,000
D. debit N800,000

Explanation

Number of shares issued = N800,000/N0.50 = 1,600,000. Amount received on application = N1×1,600,000 = N1,600,000, recorded as Dr Cash a/c with N1,600,000.

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