Neco Model Questions Vol1 2017 Financial Accounting Question 7

Practice objective / multiple choice question 7 from the 2017 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2017 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 7 NECO_MODEL_QUESTIONS_VOL1 • 2017 • FINANCIAL_ACCOUNTING • objective

On 15 March, ABC Ltd purchased inventory costing \(\text{₦}45,000\) on credit. On the same day it paid cash \(\text{₦}10,000\) for freight related to the purchase. It also received cash \(\text{₦}20,000\) from a customer as payment for a previously recorded credit sale. Record the journal entries for these transactions.

Answer Options

A. 1) Debit Inventory ₦45,000; Credit Cash ₦45,000.\n2) Debit Freight Expense ₦10,000; Credit Accounts Payable ₦10,000.\n3) Debit Accounts Receivable ₦20,000; Credit Cash ₦20,000.
B. 1) Debit Inventory ₦45,000; Credit Accounts Payable ₦45,000.\n2) Debit Cash ₦10,000; Credit Freight Expense ₦10,000.\n3) Debit Cash ₦20,000; Credit Accounts Receivable ₦20,000.
C. 1) Debit Inventory ₦45,000; Credit Accounts Payable ₦45,000.\n2) Debit Freight Expense ₦10,000; Credit Cash ₦10,000.\n3) Debit Cash ₦20,000; Credit Sales Revenue ₦20,000.
Correct Answer D. 1) Debit Inventory ₦45,000; Credit Accounts Payable ₦45,000. 2) Debit Freight Expense ₦10,000; Credit Cash ₦10,000. 3) Debit Cash ₦20,000; Credit Accounts Receivable ₦20,000.
Correct Answer
D
Correct Option:
1) Debit Inventory ₦45,000; Credit Accounts Payable ₦45,000. 2) Debit Freight Expense ₦10,000; Credit Cash ₦10,000. 3) Debit Cash ₦20,000; Credit Accounts Receivable ₦20,000.

About This Question

This is Neco Model Questions Vol1 2017 Financial Accounting Question 7. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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