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WAEC Financial Accounting 1994 Question 31

Question 31

Correction of Errors and Suspense Account

A cheque drawn for ₦1,200 was entered in the cash book as a receipt. The accounting entries are

  1. A.credit Cash Account, debit Bank Account with ₦1,200
  2. B.debit Cash Account, credit Bank Account with ₦1,200
  3. C.credit Cash Account, debit Suspense Account with ₦2,400
  4. D.debit Cash Account, debit Suspense Account with ₦2,400
  5. E.credit Bank Account, debit Suspense Account with ₦2,400.
Show the answer and explanation

Answer: E (credit Bank Account, debit Suspense Account with ₦2,400.)

Explanation

The bank column was debited ₦1,200 instead of credited, so credit bank ₦2,400 (cancel and correct), debit suspense.