WAEC Accounting 2012 Objective — Question 5

Question 5 of 50 from the West African Examinations Council (WAEC) Accounting 2012 Objective paper, with the correct answer and a full explanation.

A fixed asset fully written-down by a trader is considered to be worth ₦5,000. The double entry required to affect this is

A. debit Asset Account, credit Purchases Account
B. debit Capital Account, credit Asset AccountCorrect
C. debit Capital Account, credit Capital Account
D. debit Asset Account, credit Profit and Loss Account

Explanation

Since writing down the fixed asset will reduce its value, this will lead to reduction in capital and asset. Thus, the accounting entry to record this is Dr: Capital account, Cr: Asset account.

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