Neco 2017 Financial Accounting Question 7

Practice objective / multiple choice question 7 from the 2017 Neco Financial Accounting examination.

Neco 2017 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 7 NECO • 2017 • FINANCIAL_ACCOUNTING • objective

The trial balance of a small enterprise shows the following balances: Dr Cash \( \text{₦}150,000 \), Dr Purchases \( \text{₦}80,000 \), Cr Sales \( \text{₦}200,000 \), Cr Capital \( \text{₦}30,000 \), Dr Suspense Account \( \text{₦}5,000 \). The total debits equal \( \text{₦}235,000 \) and total credits equal \( \text{₦}230,000 \). It is later discovered that a sales transaction of \( \text{₦}20,000 \) was mistakenly posted to Purchases instead of Sales. Determine the amount that must be transferred from the Suspense Account to correct the trial balance, and give the corrected balances of the Purchases and Sales accounts.

Answer Options

A. Transfer ₦35,000 to Suspense (debit); corrected Purchases = ₦80,000; corrected Sales = ₦200,000
B. Transfer ₦35,000 to Suspense (credit); corrected Purchases = ₦60,000; corrected Sales = ₦220,000
C. Transfer ₦15,000 to Suspense (debit); corrected Purchases = ₦70,000; corrected Sales = ₦210,000
Correct Answer D. Transfer ₦35,000 to Suspense (debit); corrected Purchases = ₦60,000; corrected Sales = ₦220,000
Correct Answer
D
Correct Option:
Transfer ₦35,000 to Suspense (debit); corrected Purchases = ₦60,000; corrected Sales = ₦220,000

About This Question

This is Neco 2017 Financial Accounting Question 7. It is one of the objective questions from the 2017 Neco Financial Accounting examination.

Difficulty level: Medium .

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