Neco 2020 Financial Accounting Question 17

Practice objective / multiple choice question 17 from the 2020 Neco Financial Accounting examination.

Neco 2020 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 17 NECO • 2020 • FINANCIAL_ACCOUNTING • objective

The cash receipts journal shows a total receipt of \(\text{₦}42,500\) while the sales ledger records sales of \(\text{₦}45,000\) for the same period. Consequently the trial balance has a \(\text{₦}2,500\) debit‑side discrepancy. Assuming the error is one of the following - a transposition error, an error of commission, an error of principle, or an omission - identify the most likely type of error and prepare the correcting journal entry required to clear the suspense account.

Answer Options

A. Error of principle; correcting entry - Debit Sales ₦2,500, Credit Cash ₦2,500
B. Error of commission; correcting entry - Debit Cash ₦2,500, Credit Sales ₦2,500
C. Error of principle; correcting entry - Debit Cash ₦2,000, Credit Sales ₦2,000
Correct Answer D. Error of principle; correcting entry - Debit Cash ₦2,500, Credit Sales ₦2,500
Correct Answer
D
Correct Option:
Error of principle; correcting entry - Debit Cash ₦2,500, Credit Sales ₦2,500

About This Question

This is Neco 2020 Financial Accounting Question 17. It is one of the objective questions from the 2020 Neco Financial Accounting examination.

Difficulty level: Medium .

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