Gce Model Questions Vol1 2019 Financial Accounting Question 29

Practice objective / multiple choice question 29 from the 2019 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2019 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 29 GCE_MODEL_QUESTIONS_VOL1 • 2019 • FINANCIAL_ACCOUNTING • objective

The Trade Receivables Control Account shows an opening balance of \(£150,000\) (debit). During the year the following entries were posted: Credit sales \(£500,000\), cash receipts \(£415,000\), returns outwards \(£10,000\), discounts allowed \(£5,000\). The subsidiary ledger total of individual customer balances at year‑end is \(£215,000\). Identify the error in the control account and state its amount.

Answer Options

A. Discounts allowed understated by £5,000 (error amount £5,000)
Correct Answer B. Cash receipts understated by £5,000 (error amount £5,000)
C. Cash receipts overstated by £5,000 (error amount £5,000)
D. Opening balance understated by £5,000 (error amount £5,000)
Correct Answer
B
Correct Option:
Cash receipts understated by £5,000 (error amount £5,000)

About This Question

This is Gce Model Questions Vol1 2019 Financial Accounting Question 29. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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