Opening stock Purchases Sales Closing Stocks |
₦ 20,000 70,000 100,000 15,000 |
What was the gross profit?
₦35,000
₦75,000
₦50,000
₦25,000
Correct answer is D
Gross profit = sales - cost of goods sold
100,000 - 75,000
⇒ ₦25,000
| Opening stock | ₦ |
| Department A B |
100 800 |
| Purchases: A B Wages of workers Salaries |
1500 2000 50 100 |
| Sales A B |
3000 5000 |
Expenses are to be shared in the ratio of sales.
What was the cost of goods sold?
₦25,000
₦35,000
₦50,000
₦75,000
Correct answer is D
Cost of goods sold = Opening stock + Purchases - closing stocks
20,000 + 70,000 - 15,000
⇒ ₦75,000
Discount received is charge to
Current account
Profit and loss
Trading account
Balance sheet
Correct answer is B
Discount received is treated as income to the business hence it is credited to the profit and loss.
The purpose of profit and loss account is to ascertain
Gross profit
Capital
Expenses
Net profit
Correct answer is D
The profit and loss account also known as Income statement is prepared to ascertain the net profit. The net profit is ascertain when the expenses is deducted from the Gross Profit.
A rent of ₦50,000 was paid by samson to his landlady by cheque. The double entry in Samson's book is
Debit rent account, Credit bank account
Debit Rent account, Credit Samson's account
Debit Bank account, Credit Rent account
Debit Samson's account, Credit Rent account
Correct answer is B
Since Rent is receiving then rent account is debited while Samson's account is credited because it is giving out.