Neco 2023 Financial Accounting Question 9
Practice objective / multiple choice question 9 from the 2023 Neco Financial Accounting examination.
On 1 March XYZ Ltd purchased equipment with a list price of \( \text{₦}250,000\). A trade discount of \(5\%\) was granted and a cash discount of \(2\%\) was offered for payment within 10 days. The company paid the discounted amount of \( \text{₦}232,750\) on 5 March and later incurred freight‑in of \( \text{₦}5,000\) paid on 8 March. The trade discount was mistakenly recorded as a purchase discount. Prepare the correct journal entries to record the purchase, the discounts and the freight, and state the total amount that should be capitalised as the cost of the equipment.
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About This Question
This is Neco 2023 Financial Accounting Question 9. It is one of the objective questions from the 2023 Neco Financial Accounting examination.
Difficulty level: Medium .
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