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WAEC Financial Accounting 1997 Question 2

Question 2

Correction of Errors and Suspense Account

To correct an error, the Purchases Account was debited while Suspense Account was credited. Which of the following was the cause of the error?

  1. A.Undercasting of purchases
  2. B.Overcasting of purchases
  3. C.Original entry
  4. D.Transportation of returns outwards
  5. E.Omission of creditors' balances
Show the answer and explanation

Answer: A (Undercasting of purchases)

Explanation

The correction adds to the purchases debit, so purchases had been added up too low (undercast).