Gce Model Questions Vol1 2020 Financial Accounting Question 39

Practice objective / multiple choice question 39 from the 2020 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2020 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 39 GCE_MODEL_QUESTIONS_VOL1 • 2020 • FINANCIAL_ACCOUNTING • objective

The trade receivables control account shows an opening balance of \(£120,000\). During the year the following items were recorded: credit sales \(£350,000\), cash receipts \(£300,000\), sales returns \(£10,000\) and write‑off of irrecoverable debts \(£5,000\). The subsidiary ledger at year‑end lists individual customer balances totalling \(£158,000\). Determine the amount of discrepancy between the control account and the subsidiary ledger and suggest the most likely cause of the discrepancy.

Answer Options

A. £5,000 discrepancy; likely cause is an omitted sales return
B. £2,000 discrepancy; likely cause is an over‑recorded cash receipt
Correct Answer C. £3,000 discrepancy; likely cause is an unrecorded cash receipt
D. £3,000 discrepancy; likely cause is a posting error in the subsidiary ledger
Correct Answer
C
Correct Option:
£3,000 discrepancy; likely cause is an unrecorded cash receipt

About This Question

This is Gce Model Questions Vol1 2020 Financial Accounting Question 39. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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