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JAMB Principles of Accounts 2012 Question 18

Question 18

Correction of Errors and Suspense Account

At the end of a financial period, the trading profit and loss account of a sole trader shows a profit of ₦180,000. It is however discovered that revenue of ₦15,000 is recorded as expenses while expenses of ₦4,000 is recorded as revenue.
The revenue to be added as an adjustment is

  1. A.₦34,000
  2. B.₦30,000
  3. C.₦15,000
  4. D.₦4,000
Show the answer and explanation

Answer: B (₦30,000)

Explanation

Removing the ₦15 000 from expenses and putting it into revenue adds 2 × 15 000 = ₦30 000 to profit.