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Goods were purchased for resale on credit costing ₦150,000 on 30th ...

Goods were purchased for resale on credit costing ₦150,000 on 30th September 20X8 from Tosanwumi International. The entry to record these transaction is debit
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  • A Tosanwumi International, credit purchase Account
  • B Purchase Account ₦150,000, credit Tosanwumi International Account ₦150,000
  • C Credit Account ₦150,000, Credit Tosanwumi International ₦150,000
  • D Tosanwumi International ₦150,000, credit credit Account ₦150,000
Correct Answer: Option B
Explanation:
When a purchase was made, a credit purchase invoice would have been issued by the supplier, Tosanwumi International, which would be signed by Mr. Roi as evidence of his acceptance of liability to pay for the goods.
The two accounts needed to record this transaction are purchase Account and Tosanwumi International Account. purchase account would be debited while the Tosanwumi International Account credited.

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