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JAMB Principles of Accounts 2003 Question 27

Question 27

Manufacturing Accounts

Given:
Cost of raw material issued to production ₦37 000
Opening stock of raw material ₦2 000
Purchases of raw material ₦38 000
Wages ₦5 000
What is the closing stock of raw material?

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

Answer: B (₦3 000)

Explanation

Closing stock = opening 2 000 + purchases 38 000 − issued 37 000 = ₦3 000. Wages are not part of raw materials.