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:
- the total of current assets will be understated.
- the total of current liabilities will be overstated.
- the total of motor expenses will be understated.
- 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
- Not correct – the total of current assets will not be affected.
- Not correct – the total of current liabilities will not be affected.
- Not correct – the total of motor expenses will be overstated.
- Correct
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