Neco Model Questions Vol1 2024 Financial Accounting Question 4

Practice objective / multiple choice question 4 from the 2024 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2024 Financial Accounting Objective / Multiple Choice Easy Difficulty
Question 4 NECO_MODEL_QUESTIONS_VOL1 • 2024 • FINANCIAL_ACCOUNTING • objective

During the month, a cash receipt of \(120,000\) from a customer was mistakenly posted to the Bank account instead of the Cash account. Assuming the original entry was Debit Bank \(120,000\) and Credit Sales Revenue \(120,000\), show the correcting journal entries and state the effect of the error on the trial balance.

Answer Options

A. Reverse: Dr Sales Revenue 120,000; Cr Bank 120,000. Then correct: Dr Cash 120,000; Cr Sales Revenue 120,000. Trial balance remains balanced with a debit excess of 120,000.
B. Reverse: Dr Bank 120,000; Cr Sales Revenue 120,000. Then correct: Dr Cash 120,000; Cr Sales Revenue 120,000. Trial balance remains balanced.
C. Reverse: Dr Sales Revenue 120,000; Cr Bank 120,000. Then correct: Dr Cash 120,000; Cr Sales Revenue 120,000. Trial balance is out of balance by 120,000.
Correct Answer D. Reverse: Dr Sales Revenue 120,000; Cr Bank 120,000. Then correct: Dr Cash 120,000; Cr Sales Revenue 120,000. Trial balance remains balanced.
Correct Answer
D
Correct Option:
Reverse: Dr Sales Revenue 120,000; Cr Bank 120,000. Then correct: Dr Cash 120,000; Cr Sales Revenue 120,000. Trial balance remains balanced.

About This Question

This is Neco Model Questions Vol1 2024 Financial Accounting Question 4. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Easy .

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