Question 30
WAEC_MODEL_QUESTIONS_VOL1
•
2024
•
FINANCIAL_ACCOUNTING
•
objective
During the month the following transactions were recorded:
1. Purchased equipment for ₦150,000 cash.
2. Sold goods on credit for ₦80,000 (cost of goods sold ₦50,000).
3. Received a bank loan of ₦200,000 (interest payable annually).
4. Paid salaries of ₦30,000 in cash.
5. Received a cash discount of ₦2,000 on a previous purchase, which was mistakenly entered in the Cash Receipts Journal instead of the Purchases Journal.
The accountant also omitted recording transaction 3 in the Cash Payments Journal. Identify the two journals where the errors occurred and write the correct journal entries (debit and credit accounts) that should be made to rectify each error.
Answer Options
Correct Answer
A.
The errors are in the Purchases Journal and the Cash Payments Journal.\n• Reverse the wrong cash‑discount entry: Debit Discount Received ₦2,000; Credit Cash ₦2,000. Then record the correct entry in the Purchases Journal: Debit Purchases ₦2,000; Credit Cash ₦2,000.\n• Record the omitted loan receipt in the Cash Payments Journal: Debit Bank (Loan Payable) ₦200,000; Credit Cash ₦200,000.
B.
The errors are in the Purchases Journal and the Cash Receipts Journal.
• Reverse the wrong cash‑discount entry: Debit Discount Received ₦2,000; Credit Cash ₦2,000. Then record the correct entry in the Purchases Journal: Debit Inventory ₦2,000; Credit Cash ₦2,000.
• Record the omitted loan receipt in the Cash Receipts Journal: Debit Bank (Loan Payable) ₦200,000; Credit Cash ₦200,000.
C.
The errors are in the Purchases Journal and the Cash Payments Journal.
• Reverse the wrong cash‑discount entry: Debit Discount Received ₦2,000; Credit Accounts Payable ₦2,000. Then record the correct entry in the Purchases Journal: Debit Purchases ₦2,000; Credit Accounts Payable ₦2,000.
• Record the omitted loan receipt in the Cash Payments Journal: Debit Cash ₦200,000; Credit Bank (Loan Payable) ₦200,000.
D.
The errors are in the Sales Journal and the Cash Receipts Journal.
• Reverse the wrong cash‑discount entry: Debit Cash ₦2,000; Credit Discount Received ₦2,000. Then record the correct entry in the Sales Journal: Debit Purchases ₦2,000; Credit Cash ₦2,000.
• Record the omitted loan receipt in the Cash Receipts Journal: Debit Cash ₦200,000; Credit Bank (Loan Payable) ₦200,000.
Correct Answer
A
Correct Option:
The errors are in the Purchases Journal and the Cash Payments Journal.\n• Reverse the wrong cash‑discount entry: Debit Discount Received ₦2,000; Credit Cash ₦2,000. Then record the correct entry in the Purchases Journal: Debit Purchases ₦2,000; Credit Cash ₦2,000.\n• Record the omitted loan receipt in the Cash Payments Journal: Debit Bank (Loan Payable) ₦200,000; Credit Cash ₦200,000.
About This Question
This is
Waec Model Questions Vol1
2024
Financial Accounting
Question 30.
It is one of the
objective
questions from the
2024
Waec Model Questions Vol1
Financial Accounting
examination.
Difficulty level:
Medium
.