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JAMB Principles of Accounts 1994 Question 16

Question 16

Final Accounts of a Sole Trader

Given:
Purchases ₦20 000
Sales ₦40 000
Carriage inwards ₦5 000
Carriage outwards ₦5 000
Opening stock ₦10 000
Closing stock ₦5 000
What is the cost of goods sold?

  1. A.₦30 000
  2. B.₦25 000
  3. C.₦20 000
  4. D.₦15 000
Show the answer and explanation

Answer: A (₦30 000)

Explanation

Cost of goods sold = opening stock + purchases + carriage inwards − closing stock = 10 000 + 20 000 + 5 000 − 5 000 = ₦30 000. Carriage outwards is a selling expense.