Neco 2019 Financial Accounting Question 2

Practice objective / multiple choice question 2 from the 2019 Neco Financial Accounting examination.

Neco 2019 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 2 NECO • 2019 • FINANCIAL_ACCOUNTING • objective

During the period a cash sale of \(\text{₦}6,500\) was recorded only as a debit to Cash, with no corresponding credit entry. All other entries are correct. As a result the trial balance shows total debits exceeding total credits by \(\text{₦}6,500\).\n(a) Identify the type of error.\n(b) State the effect of the error on the trial balance.\n(c) What amount should be transferred to the suspense account to restore balance?

Answer Options

A. Error type: Omission; Effect: Debits exceed credits by ₦6,500; Amount to transfer to suspense: ₦3,250
B. Error type: Commission; Effect: Debits exceed credits by ₦6,500; Amount to transfer to suspense: ₦6,500
C. Error type: Omission; Effect: Credits exceed debits by ₦6,500; Amount to transfer to suspense: ₦6,500
Correct Answer D. Error type: Omission; Effect: Debits exceed credits by ₦6,500; Amount to transfer to suspense: ₦6,500
Correct Answer
D
Correct Option:
Error type: Omission; Effect: Debits exceed credits by ₦6,500; Amount to transfer to suspense: ₦6,500

About This Question

This is Neco 2019 Financial Accounting Question 2. It is one of the objective questions from the 2019 Neco Financial Accounting examination.

Difficulty level: Medium .

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