Neco 2021 Financial Accounting Question 49

Practice objective / multiple choice question 49 from the 2021 Neco Financial Accounting examination.

Neco 2021 Financial Accounting Objective / Multiple Choice Easy Difficulty

Question 49 NECO • 2021 • FINANCIAL_ACCOUNTING • objective

A government grant of \(60,000\) is received in cash, of which \(20,000\) is restricted for capital expenditure. Record the journal entries required to recognise the receipt and the restriction.

Answer Options

A. Entry 1: Debit Cash 60,000; Credit Grant revenue 60,000. Entry 2: Debit Restricted capital fund 20,000; Credit Grant revenue 20,000.

B. Entry 1: Debit Cash 40,000; Credit Grant revenue 40,000. Entry 2: Debit Restricted capital fund 20,000; Credit Cash 20,000.

C. Entry 1: Debit Cash 60,000; Credit Grant revenue 40,000; Credit Restricted capital fund 20,000. Entry 2: Debit Restricted capital fund 20,000; Credit Cash 20,000.

Correct Answer D. Entry 1: Debit Cash 60,000; Credit Grant revenue 60,000. Entry 2: Debit Restricted capital fund 20,000; Credit Cash 20,000.

Correct Answer

Correct Option:

Entry 1: Debit Cash 60,000; Credit Grant revenue 60,000. Entry 2: Debit Restricted capital fund 20,000; Credit Cash 20,000.

About This Question

This is Neco 2021 Financial Accounting Question 49. It is one of the objective questions from the 2021 Neco Financial Accounting examination.

Difficulty level: Easy .

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