JAMB Accounting 2020 Objective — Question 10

Question 10 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2020 Objective paper, with the correct answer and a full explanation.

10. If Mr. Yusuf starts a business with N20,000 in his bank account, this transaction will be recorded as a

A. A. Dr: cash account Cr: capital account
B. B. Dr: cash account Cr: bank account
C. C. Dr: capital account Cr: bank account
D. D. Dr: bank account and Cr: capital accountCorrect

Explanation

When a new business starts, the accounting record is always Dr: cash/bank account and Cr: capital account. Since the money is in the bank, the bank account will be debited.

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