JAMB Accounting 2015 Objective — Question 5

Question 5 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2015 Objective paper, with the correct answer and a full explanation.

A business transaction is recorded in the book of accounts when the

A. owner of the business invests his ₦10,000 in another company
B. business retains part of its profits for future expansion purposes
C. business applies for overdraft facilities from its bankers
D. owners of the business collects ₦5,000 from the accountantCorrect

Explanation

The owner and the business are treated as separate entities. When the owner withdraws ₦5,000, it is treated just like giving a loan to an outsider — a recordable transaction.

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