Neco 2017 Financial Accounting Question 3

Practice essay / theory question 3 from the 2017 Neco Financial Accounting examination. This question covers Books of Original Entry .

Neco 2017 Financial Accounting Essay / Theory
Topic: Books of Original Entry
Question 3 NECO • 2017 • FINANCIAL_ACCOUNTING • essay

The following transactions were recorded by XYZ Trading Ltd. during the month of March. 1. 1 March – Purchased inventory costing ₦150,000 on credit from ABC Suppliers. 2. 5 March – Sold goods for cash at ₦120,000. The cost of the goods sold was ₦90,000. 3. 10 March – Returned defective goods to ABC Suppliers worth ₦20,000 and received a credit note. 4. 12 March – Paid the monthly rent of ₦15,000 by cheque. 5. 20 March – Received a bank loan of ₦200,000 which was deposited in the bank. Using the information above, answer the following:

Question Parts

( a )
Identify the most appropriate book of original entry for each of the five transactions (choose from Purchase Day Book, Sales Day Book, Cash Book, Returns Day Book, Journal).
( b )
Record the journal entry for each transaction. Include the date, accounts affected, and debit/credit amounts. Use the perpetual inventory system for the sale.
( c )
Using the journal entries prepared in part (b), prepare a trial balance as at 31 March. State whether the trial balance balances. If it does not, indicate the likely error.

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About This Question

This is Neco 2017 Financial Accounting Question 3. It is one of the essay questions from the 2017 Neco Financial Accounting examination.

The question covers Books of Original Entry .

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