KASNEB CPA Practice Test & Exam Prep | Kenya

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The accounting equation states that Assets = Liabilities + Equity. If a business borrows Ksh 500,000 from a bank, which entry correctly records the transaction?

Debit Loan Payable Ksh 500,000; Credit Bank Ksh 500,000 Debit Bank Ksh 500,000; Credit Loan Payable Ksh 500,000 Debit Bank Ksh 500,000; Credit Capital Ksh 500,000 Debit Capital Ksh 500,000; Credit Bank Ksh 500,000

Correct Answer:

Debit Bank Ksh 500,000; Credit Loan Payable Ksh 500,000

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