Accounting Multiple Choice Question – 19 August 2024

Which of the following general journal entries may be accepted as being correct according to their narratives?

Select ONE answer:

1. Dr Wages expense account – £87,000 Cr NCA Buildings account – £87,000 (Labour and materials used in construction of a Building extension in a factory)
2. Directors’ personal accounts – £70,000 Cr Directors’ remuneration – £70,000 (Directors’ bonuses transferred to their “current” accounts)
3. Dr Suspense account £10,000 Cr Sales account £10,000 (Correction of £10,000 undercast of the sales account)
4. Dr Discount received account £2,000 Cr Suspense account £2,000 (Correction of misposting of discount received from cash book)

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

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 3

1. Not correct
2. Not correct
3. Correct –> (1) is wrong because labour and construction costs of building a factory would be debited to non-current assets cost. (2) is wrong because directors’ remuneration would be debited to the expense account, and (4) is wrong because a mis posting of discount received would be a debit to suspense and a credit to the discount received account.
4. Not correct

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