Neco 2023 Financial Accounting Question 17

Practice objective / multiple choice question 17 from the 2023 Neco Financial Accounting examination.

Neco 2023 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 17 NECO • 2023 • FINANCIAL_ACCOUNTING • objective

A Merchandise Inventory ledger shows an opening debit balance of \(30,000\). During the year the following entries are posted to the account:\n- Purchases: debit \(85,000\)\n- Sales returns: credit \(5,000\)\n- Cost of Goods Sold (COGS): credit \(?\)\nThe trial balance for the period totals \(115,000\) on both the debit and credit sides, and the only other credit entry affecting inventory is Sales (credit) \(70,000\). Determine (a) the amount of COGS and (b) the closing balance of Merchandise Inventory.

Answer Options

A. COGS = \(40,000\); Closing Inventory balance = \(65,000\) (debit)
B. COGS = \(45,000\); Closing Inventory balance = \(65,000\) (debit)
Correct Answer C. COGS = \(40,000\); Closing Inventory balance = \(70,000\) (debit)
D. COGS = \(35,000\); Closing Inventory balance = \(75,000\) (debit)
Correct Answer
C
Correct Option:
COGS = \(40,000\); Closing Inventory balance = \(70,000\) (debit)

About This Question

This is Neco 2023 Financial Accounting Question 17. It is one of the objective questions from the 2023 Neco Financial Accounting examination.

Difficulty level: Medium .

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