Neco 2021 Financial Accounting Question 25

Practice objective / multiple choice question 25 from the 2021 Neco Financial Accounting examination.

Neco 2021 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 25 NECO • 2021 • FINANCIAL_ACCOUNTING • objective

A local government prepares its annual financial statements on a modified accrual basis. The following information is available for the fiscal year: cash revenue collected \( \text{₦}15,000,000 \), accrued revenue not yet collected \( \text{₦}3,500,000 \), cash expenditure paid \( \text{₦}12,000,000 \), accrued expenditure unpaid \( \text{₦}2,200,000 \), capital grants received in cash \( \text{₦}4,000,000 \), capital grants receivable \( \text{₦}1,000,000 \), and depreciation expense \( \text{₦}800,000 \). Compute the net assets at year‑end and state whether net assets increased or decreased compared with an opening net assets of \( \text{₦}5,000,000 \).

Answer Options

Correct Answer A. Net assets at year‑end = ₦20,500,000, which is an increase of ₦15,500,000 over the opening balance.
B. Net assets at year‑end = ₦21,200,000, which is an increase of ₦16,200,000 over the opening balance.
C. Net assets at year‑end = ₦19,800,000, which is an increase of ₦14,800,000 over the opening balance.
D. Net assets at year‑end = ₦20,500,000, which is a decrease of ₦15,500,000 over the opening balance.
Correct Answer
A
Correct Option:
Net assets at year‑end = ₦20,500,000, which is an increase of ₦15,500,000 over the opening balance.

About This Question

This is Neco 2021 Financial Accounting Question 25. It is one of the objective questions from the 2021 Neco Financial Accounting examination.

Difficulty level: Hard .

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