Neco Model Questions Vol1 2020 Financial Accounting Question 9

Practice objective / multiple choice question 9 from the 2020 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2020 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 9 NECO_MODEL_QUESTIONS_VOL1 • 2020 • FINANCIAL_ACCOUNTING • objective

On 1 March the business purchased inventory on credit for ₦180,000 and paid cash for freight charges of ₦20,000. (a) Record the appropriate journal entry for these transactions. (b) State the effect of each part of the entry on the accounting equation (Assets = Liabilities + Equity).

Answer Options

Correct Answer A. Debit Inventory 180,000; Debit Freight Expense 20,000; Credit Accounts Payable 180,000; Credit Cash 20,000. Net effect: Assets +160,000; Liabilities +180,000; Equity -20,000.
B. Credit Inventory 180,000; Debit Freight Expense 20,000; Credit Accounts Payable 180,000; Credit Cash 20,000. Net effect: Assets -160,000; Liabilities +180,000; Equity -20,000.
C. Debit Inventory 180,000; Debit Freight Expense 20,000; Credit Accounts Payable 180,000; Credit Cash 10,000. Net effect: Assets +170,000; Liabilities +180,000; Equity -10,000.
D. Debit Inventory 180,000; Debit Freight Expense 20,000; Credit Accounts Payable 200,000; Credit Cash 20,000. Net effect: Assets +160,000; Liabilities +200,000; Equity -40,000.
Correct Answer
A
Correct Option:
Debit Inventory 180,000; Debit Freight Expense 20,000; Credit Accounts Payable 180,000; Credit Cash 20,000. Net effect: Assets +160,000; Liabilities +180,000; Equity -20,000.

About This Question

This is Neco Model Questions Vol1 2020 Financial Accounting Question 9. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

View More Neco Model Questions Vol1 2020 Financial Accounting Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support