Post Utme Babcock University 2024 Accounting Question 32

Practice objective / multiple choice question 32 from the 2024 Post Utme Babcock University Accounting examination.

Post Utme Babcock University 2024 Accounting Objective / Multiple Choice
Question 32 POST_UTME_BABCOCK_UNIVERSITY • 2024 • ACCOUNTING • objective

A government agency is responsible for collecting taxes on behalf of the state. The agency's accounting records show that it has collected ₦1,000,000 in taxes but has not yet remitted the funds to the state. What is the correct accounting treatment for this situation?

Answer Options

A. Recognize the taxes as revenue and record a liability for the amount owed to the state.
Correct Answer B. Record the taxes as an asset and recognize the liability for the amount owed to the state.
C. Do nothing, as the taxes have not yet been remitted.
D. Write off the taxes as a loss in the current period.
Correct Answer
B
Correct Option:
Record the taxes as an asset and recognize the liability for the amount owed to the state.

About This Question

This is Post Utme Babcock University 2024 Accounting Question 32. It is one of the objective questions from the 2024 Post Utme Babcock University Accounting examination.

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