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WAEC Financial Accounting 1997 Question 25

Question 25

Double Entry and the Ledger

An item is fictitious because it

  1. A.does not exist
  2. B.is too costly
  3. C.is worthless
  4. D.cannot be sold for cash
  5. E.is bought on credit.
Show the answer and explanation

Answer: A (does not exist)

Explanation

A fictitious asset (such as preliminary expenses) has no real physical existence; it is only a debit balance carried forward.