Neco 2024 Financial Accounting Question 1

Practice objective / multiple choice question 1 from the 2024 Neco Financial Accounting examination.

Neco 2024 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 1 NECO • 2024 • FINANCIAL_ACCOUNTING • objective

A company bought a delivery van for \( \text{₦}500{,}000 \) cash but mistakenly recorded the transaction as a repair expense. Assuming the van is a non‑current asset, state the effect of this error on (i) the reported profit for the period, and (ii) the total assets shown in the balance sheet.

Answer Options

A. Profit is overstated by ₦500,000 and total assets are understated by ₦500,000.
B. Profit is overstated by ₦500,000 and total assets are overstated by ₦500,000.
C. Profit is understated by ₦500,000 and total assets are overstated by ₦500,000.
Correct Answer D. Profit is understated by ₦500,000 and total assets are understated by ₦500,000.
Correct Answer
D
Correct Option:
Profit is understated by ₦500,000 and total assets are understated by ₦500,000.

About This Question

This is Neco 2024 Financial Accounting Question 1. It is one of the objective questions from the 2024 Neco Financial Accounting examination.

Difficulty level: Easy .

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