Neco 2025 Financial Accounting Question 23

Practice objective / multiple choice question 23 from the 2025 Neco Financial Accounting examination.

Neco 2025 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 23 NECO • 2025 • FINANCIAL_ACCOUNTING • objective

On 15 March, Delta Co purchased machinery costing \(\text{₦}250,000\) on credit. The supplier offered a cash discount of 2 % if payment is made within 10 days. The company paid the amount within the discount period and also incurred freight charges of \(\text{₦}5,000\) paid in cash. After receiving the machinery, the company discovered defective parts worth \(\text{₦}8,000\) and returned them, receiving a credit note from the supplier. Prepare the journal entries required to record (i) the purchase, (ii) the payment with discount, (iii) the freight cost, and (iv) the return of defective parts. Show the accounts affected and the amounts to be debited or credited.

Answer Options

A. 1) Dr Machinery ₦250,000 / Cr Creditors ₦250,000 2) Dr Creditors ₦250,000 / Cr Cash ₦245,000 / Cr Discount Received ₦5,000 3) Dr Freight Expense ₦5,000 / Cr Cash ₦5,000 4) Dr Creditors ₦8,000 / Cr Machinery ₦8,000
Correct Answer B. 1) Dr Machinery ₦250,000 / Cr Creditors ₦250,000\n2) Dr Creditors ₦250,000 / Cr Cash ₦245,000 / Cr Discount Received ₦5,000\n3) Dr Machinery ₦5,000 / Cr Cash ₦5,000\n4) Dr Creditors ₦8,000 / Cr Machinery ₦8,000
C. 1) Dr Machinery ₦250,000 / Cr Creditors ₦250,000 2) Dr Creditors ₦250,000 / Cr Cash ₦250,000 / Cr Discount Received ₦5,000 3) Dr Machinery ₦5,000 / Cr Cash ₦5,000 4) Dr Creditors ₦8,000 / Cr Machinery ₦8,000
D. 1) Dr Machinery ₦250,000 / Cr Creditors ₦250,000 2) Dr Creditors ₦250,000 / Cr Cash ₦245,000 / Cr Discount Received ₦5,000 3) Dr Machinery ₦5,000 / Cr Cash ₦5,000 4) Dr Machinery ₦8,000 / Cr Creditors ₦8,000
Correct Answer
B
Correct Option:
1) Dr Machinery ₦250,000 / Cr Creditors ₦250,000\n2) Dr Creditors ₦250,000 / Cr Cash ₦245,000 / Cr Discount Received ₦5,000\n3) Dr Machinery ₦5,000 / Cr Cash ₦5,000\n4) Dr Creditors ₦8,000 / Cr Machinery ₦8,000

About This Question

This is Neco 2025 Financial Accounting Question 23. It is one of the objective questions from the 2025 Neco Financial Accounting examination.

Difficulty level: Medium .

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