Neco 2020 Financial Accounting Question 25

Practice objective / multiple choice question 25 from the 2020 Neco Financial Accounting examination.

Neco 2020 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 25 NECO • 2020 • FINANCIAL_ACCOUNTING • objective

On 1 March a business purchased equipment with a list price of ₦250,000. The supplier gave a trade discount of 5\% on the list price. The business paid a cash down‑payment of ₦100,000 and agreed to pay the balance on credit 30 days later. Record the journal entries for the purchase and for the down‑payment.

Answer Options

A. Journal Entry 1: Debit Equipment ₦225,000; Credit Accounts Payable ₦225,000.\nJournal Entry 2: Debit Accounts Payable ₦100,000; Credit Cash ₦100,000.
B. Journal Entry 1: Debit Equipment ₦237,500; Credit Accounts Payable ₦237,500.\nJournal Entry 2: Debit Accounts Payable ₦120,000; Credit Cash ₦120,000.
C. Journal Entry 1: Debit Equipment ₦237,500; Credit Accounts Payable ₦237,500.\nJournal Entry 2: Debit Cash ₦100,000; Credit Accounts Payable ₦100,000.
Correct Answer D. Journal Entry 1: Debit Equipment ₦237,500; Credit Accounts Payable ₦237,500.\nJournal Entry 2: Debit Accounts Payable ₦100,000; Credit Cash ₦100,000.
Correct Answer
D
Correct Option:
Journal Entry 1: Debit Equipment ₦237,500; Credit Accounts Payable ₦237,500.\nJournal Entry 2: Debit Accounts Payable ₦100,000; Credit Cash ₦100,000.

About This Question

This is Neco 2020 Financial Accounting Question 25. It is one of the objective questions from the 2020 Neco Financial Accounting examination.

Difficulty level: Easy .

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