Day: December 4, 2019

If, in the case of an engineering firm, the cost of acquiring a vehicle is inadvertently debited to the motor expenses account in the nominal (general) ledger . . .

Select ONE answer:

1. the total of current assets will be understated.
2. the total of current liabilities will be overstated.
3. the total of motor expenses will be understated.
4. the total of fixed assets will be understated.

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – the total of current assets will not be affected.
2. Not correct – the total of current liabilities will not be affected.
3. Not correct – the total of motor expenses will be overstated.
4. Correct

 

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