Waec Model Questions Vol1 2021 Financial Accounting Question 25

Practice objective / multiple choice question 25 from the 2021 Waec Model Questions Vol1 Financial Accounting examination.

Waec Model Questions Vol1 2021 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 25 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • FINANCIAL_ACCOUNTING • objective

A cash receipt of ₦30,000 from a customer was recorded as a debit to Cash and a credit to Sales Revenue of only ₦25,000; the remaining ₦5,000 credit entry was omitted. Consequently, the trial balance shows total debits exceeding total credits by ₦5,000, and a suspense account with a credit balance of ₦5,000 was created. What journal entry should be passed to clear the suspense account, and what are the corrected balances of Cash and Sales Revenue after the adjustment?

Answer Options

A. Pass: Debit Suspense ₦5,000, Credit Sales Revenue ₦5,000. Corrected balances - Cash = ₦30,000; Sales Revenue = ₦35,000.
B. Pass: Debit Sales Revenue ₦5,000, Credit Suspense ₦5,000. Corrected balances - Cash = ₦30,000; Sales Revenue = ₦25,000.
C. Pass: Debit Suspense ₦5,000, Credit Cash ₦5,000. Corrected balances - Cash = ₦25,000; Sales Revenue = ₦30,000.
Correct Answer D. Pass: Debit Suspense ₦5,000, Credit Sales Revenue ₦5,000. Corrected balances - Cash = ₦30,000; Sales Revenue = ₦30,000.
Correct Answer
D
Correct Option:
Pass: Debit Suspense ₦5,000, Credit Sales Revenue ₦5,000. Corrected balances - Cash = ₦30,000; Sales Revenue = ₦30,000.

About This Question

This is Waec Model Questions Vol1 2021 Financial Accounting Question 25. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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