Gce Model Questions Vol1 2025 Financial Accounting Question 38

Practice objective / multiple choice question 38 from the 2025 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2025 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 38 GCE_MODEL_QUESTIONS_VOL1 • 2025 • FINANCIAL_ACCOUNTING • objective

On 1 March a company purchased equipment for \(\text{₦}45,000\) cash. On the same day it became entitled to a government grant of \(\text{₦}5,000\) payable on receipt of the equipment. Record the journal entries required to reflect these transactions using the double‑entry system.

Answer Options

A. Debit Equipment \(\text{₦}45,000\) / Credit Cash \(\text{₦}45,000\); Debit Grant Receivable \(\text{₦}5,000\) / Credit Grant Income \(\text{₦}4,000\).
Correct Answer B. Debit Equipment \(\text{₦}45,000\) / Credit Cash \(\text{₦}45,000\); Debit Grant Receivable \(\text{₦}5,000\) / Credit Grant Income \(\text{₦}5,000\).
C. Debit Equipment \(\text{₦}45,000\) / Credit Cash \(\text{₦}45,000\); Debit Grant Receivable \(\text{₦}5,000\) / Credit Other Income \(\text{₦}5,000\).
D. Debit Equipment \(\text{₦}45,000\) / Credit Cash \(\text{₦}45,000\); Debit Cash \(\text{₦}5,000\) / Credit Grant Income \(\text{₦}5,000\).
Correct Answer
B
Correct Option:
Debit Equipment \(\text{₦}45,000\) / Credit Cash \(\text{₦}45,000\); Debit Grant Receivable \(\text{₦}5,000\) / Credit Grant Income \(\text{₦}5,000\).

About This Question

This is Gce Model Questions Vol1 2025 Financial Accounting Question 38. It is one of the objective questions from the 2025 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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