CIMA BA3 · Chapter 7 · Question 6 of 10
A machine costing $12,000 was debited to the repairs account. Which journal entry corrects the error?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Debit Machinery $12,000, Credit Repairs $12,000
Explanation
The cost must be removed from repairs (credit) and recognised as a non-current asset (debit machinery). Both sides of the original entry were made, so no suspense account entry is involved.
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