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JAMB Commerce 2014 Question 14

Question 14

Purchase and Sale of Goods

A carton of noodles valued at N2,000 was invoiced at N200 only. The accounting procedure to correct this error is to issue

  1. A.an invoice for N200.
  2. B.a debit note for N2,000.
  3. C.a credit note for N1,800.
  4. D.a debit note for N1,800.
Show the answer and explanation

Answer: D (a debit note for N1,800.)

Explanation

The buyer was undercharged by 2 000 − 200 = N1 800, so the seller sends a debit note for N1 800.