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JAMB Principles of Accounts 2000 Question 21

Question 21

Manufacturing Accounts

In a manufacturing company, the total cost of goods produced is equivalent to

  1. A.purchases
  2. B.sales
  3. C.cost of goods sold
  4. D.cost of materials used.
Show the answer and explanation

Answer: A (purchases)

Explanation

In a manufacturer's trading account the cost of goods produced takes the place that purchases have in a trader's account.