Post Utme Covenant University 2020 Accounting Question 18

Practice objective / multiple choice question 18 from the 2020 Post Utme Covenant University Accounting examination.

Post Utme Covenant University 2020 Accounting Objective / Multiple Choice
Question 18 POST_UTME_COVENANT_UNIVERSITY • 2020 • ACCOUNTING • objective

A company's balance sheet as at 31st December, 2022 is as follows: | Asset | ₦ | Liability | ₦ | Equity | ₦ | | --- | --- | --- | --- | --- | --- | | Cash | 10,000 | Accounts Payable | 30,000 | Retained Earnings | 20,000 | | Bank | 20,000 | Long-term Debt | 100,000 | Common Stock | 50,000 | | Inventory | 30,000 | Total Liabilities | 130,000 | Total Equity | 120,000 | | Total Assets | 60,000 | | | | | The company's accountant has made an error in the balance sheet. Identify the error and correct it.

Answer Options

A. The error is in the Cash account. The debit balance should be ₦0.
B. The error is in the Accounts Payable account. The credit balance should be ₦0.
Correct Answer C. The error is in the Retained Earnings account. The credit balance should be ₦0.
D. The error is in the Common Stock account. The credit balance should be ₦0.
Correct Answer
C
Correct Option:
The error is in the Retained Earnings account. The credit balance should be ₦0.

About This Question

This is Post Utme Covenant University 2020 Accounting Question 18. It is one of the objective questions from the 2020 Post Utme Covenant University Accounting examination.

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