Neco 2020 Financial Accounting Question 39

Practice objective / multiple choice question 39 from the 2020 Neco Financial Accounting examination.

Neco 2020 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 39 NECO • 2020 • FINANCIAL_ACCOUNTING • objective

The trial balance of ABC Co shows total debits of \(\text{₦}1,250,000\) and total credits of \(\text{₦}1,210,000\). It is known that (i) a purchase of inventory for \(\text{₦}30,000\) was recorded as a debit to Purchases but the corresponding credit to Accounts Payable was omitted; (ii) a cash sale of \(\text{₦}20,000\) was correctly recorded. After correcting the error(s), what is the new difference between total debits and total credits, and does the trial balance now balance?

Answer Options

Correct Answer A. Still out of balance; debits exceed credits by \(\text{₦}10,000\)
B. Out of balance; credits exceed debits by \(\text{₦}10,000\)
C. Still out of balance; debits exceed credits by \(\text{₦}20,000\)
D. Now balanced; debits equal credits
Correct Answer
A
Correct Option:
Still out of balance; debits exceed credits by \(\text{₦}10,000\)

About This Question

This is Neco 2020 Financial Accounting Question 39. It is one of the objective questions from the 2020 Neco Financial Accounting examination.

Difficulty level: Medium .

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