- 1 Marks
Question
A draft financial statement of DS Enterprises revealed that an amount of N10,000 expended on repairs of telephone was recorded as motor vehicle expenses. State the entries to reverse this error.
A. Dr. Motor vehicle expenses account, Cr. Telephone expenses account
B. Dr. Telephone expenses account, Cr. Suspense account
C. Dr. Motor vehicle account, Cr. Suspense account
D. Dr. Telephone expenses account, Cr. Motor vehicle expenses account
E. Dr. Suspense account, Cr. Telephone expenses account
Answer
Answer: D
Explanation:
The error involves the misclassification of expenses. The correct journal entry is to debit the telephone expenses account and credit the motor vehicle expenses account to rectify the misposting.
- Tags: Correction of Errors, Motor Vehicle, Telephone Expenses
- Level: Level 1
- Topic: Correction of errors
- Series: MAY 2015
- Uploader: Joseph