Neco 2021 Financial Accounting Question 20

Practice objective / multiple choice question 20 from the 2021 Neco Financial Accounting examination.

Neco 2021 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 20 NECO • 2021 • FINANCIAL_ACCOUNTING • objective

When preparing the trial balance, the total of debit balances was \(\text{₦}1,245,000\) and the total of credit balances was \(\text{₦}1,230,000\), giving a difference of \(\text{₦}15,000\) (debits higher). It was later found that a purchase entry of \(\text{₦}7,500\) was mistakenly recorded as a debit instead of a credit, and a sales entry of \(\text{₦}30,000\) was omitted entirely. Assuming no other errors, determine the effect of these errors on the trial balance totals and calculate the amount that should be posted to the suspense account to balance the trial balance.

Answer Options

Correct Answer A. Errors cause a debit excess of \(\text{₦}15,000\); post a credit of \(\text{₦}15,000\) to the suspense account to balance the trial balance
B. Errors cause a debit excess of \(\text{₦}7,500\); post a credit of \(\text{₦}7,500\) to the suspense account to balance the trial balance
C. Errors cause a credit excess of \(\text{₦}15,000\); post a debit of \(\text{₦}15,000\) to the suspense account to balance the trial balance
D. Errors cause a debit excess of \(\text{₦}22,500\); post a credit of \(\text{₦}22,500\) to the suspense account to balance the trial balance
Correct Answer
A
Correct Option:
Errors cause a debit excess of \(\text{₦}15,000\); post a credit of \(\text{₦}15,000\) to the suspense account to balance the trial balance

About This Question

This is Neco 2021 Financial Accounting Question 20. It is one of the objective questions from the 2021 Neco Financial Accounting examination.

Difficulty level: Medium .

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