JAMB Principles of Accounts 1997 Question 16

Question 16

Cash Book

The receipt of cash from a customer who bought goods with ₦800 list price, 25% trade discount and 2/10, n/30 terms would, if paid within the discount period, amount to

A.₦576
B.₦588
C.₦600
D.₦624

Show the answer and explanation

Answer: B (₦588)

Explanation

Invoice = 800 − 25% = 600. Paid within 10 days, so less 2% cash discount (12): ₦588.