WAEC SSCE - Financial Accounting - 2022 (Objective)

Question 1 Report

One of the items on the credit column of a trial balance is

returns outwards

carriage outwards

returns inwards

carriage inwards

Answer Details

One of the items on the credit column of a trial balance is "returns outwards." Returns outwards, also known as "purchases returns" or "sales returns," refers to the goods or products that a business returns to its suppliers. When a company finds that the goods it purchased are damaged, defective, or not as ordered, it may choose to return them to the supplier for a refund or replacement. In accounting, returns outwards are recorded as a credit entry in the trial balance. This means that it reduces the overall balance of the account. By recording returns outwards in the credit column, the trial balance ensures that the total credits and debits remain in balance, allowing for accurate financial reporting. Returns outwards are typically deducted from the total purchases or cost of goods sold when calculating the net purchases or net cost of goods. This adjustment reflects the reduction in the company's inventory or expenses due to returning the goods. In summary, returns outwards is an item on the credit column of a trial balance and represents the goods that a business returns to its suppliers. It is recorded as a credit entry to account for the reduction in inventory or expenses associated with the returned goods.

Read lesson note on Nature And Significance Of Accounting (JAMB)

		GH⊄
January 1	Petty cash in hand	1034
January 1	Petty cash to restore float	6966
January 6	Bought note books	656
January 7	Paid wages	1828
January 14	Bought postage stamps	750
January 16	Paid to Biodun a creditor	1072
January 18	Paid wages	1856
January 23	Purchased envelopes	874
January 28	Purchased postage stamps	420

	GH⊄
Sales	200000
Purchase	170000
Opening stock	40000
Closing stock	50000

	D
Motor vehicle	500000
Stock	35000
Debtors	18000
Cash	12850
Bank overdraft	280000
Creditors	21500

	Le
Raw materials:
Stock (01/01/2017)	822000
Stock (31/12/2017)	560000
Purchases	125000
Returns of raw materials	15000

Years	Current Assets	Liabilities	Fixed Assets	Capital
	#	#	#	#
2018	52550	78600	127450	X
2017	41650	53220	Y	116780

	D
Cost	1200000
Year 1 ( 10% x 1200000)	120000
	1080000
Year 2 ( 10% x 1080000)	108000
	972000
Year 3 ( 10% x 972000)	97200
Depreciation	874800

	$
Cash book balance (credit)	750
Uncredited cheques	500
Unpresented cheques	1680
Direct credit	300
Bank charges	150






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