JAMB Accounts Principles of Accounts 2018 Paper

Concept:A partner’s current account is credited with the opening balance. Drawings and interest on drawings are debited, so they reduce the credit balance.Explanation:Tea’s opening current account balance is $\text{₦}50{,}000$ credit.Total drawings $= 3{,}000 + 2{,}000 + 4{,}000 + 1{,}500 + 2{,}500 = \text{₦}13{,}000$.Assuming a 31 December year-end, the periods from the withdrawal dates to the year-end are 11, 9, 6, 3 and 2 months respectively.Interest on drawings: $\left(3{,}000 \times \frac{11}{12} + 2{,}000 \times \frac{9}{12} + 4{,}000 \times \frac{6}{12} + 1{,}500 \times \frac{3}{12} + 2{,}500 \times \frac{2}{12}\right) \times \frac{10}{100} = \text{₦}704.17$.Closing balance $= \text{₦}50{,}000 - \text{₦}13{,}000 - \text{₦}704.17 = \text{₦}36{,}295.83$.This means the current account still has a credit balance.Answer:Tea’s current account closing balance is $\text{₦}36{,}295.83$ Credit, not Debit.