JAMB Accounts Principles of Accounts 2019 Paper

Concept:A credit purchase increases both the goods bought and the amount owed to the supplier.Explanation:Goods bought for resale are recorded in the Purchase Account.Because Tosanwumi International supplied the goods on credit, it becomes a creditor.In double entry, an increase in purchases is a debit entry.Therefore, debit the Purchase Account with $\text{₦}150{,}000$.The liability owed to Tosanwumi International increases on the credit side.Therefore, credit Tosanwumi International Account with $\text{₦}150{,}000$.Answer:Debit Purchase Account $\text{₦}150{,}000$, credit Tosanwumi International Account $\text{₦}150{,}000$.This is option B.