JAMB Principles of Accounts 2003 Question 6

Question 6

Cash Book

Use the information below to answer questions 6 and 7.
Ezekiel Malgwi is a retailer. He recorded sales representing 95% cash and 5% credit. He took the total cash sales of ₦19 000 from the business tray and banked it.
The credit sales for the period would be

  1. A.₦5 000
  2. B.₦1 900
  3. C.₦1 000
  4. D.₦950
Show the answer and explanation

Answer: C (₦1 000)

Explanation

Cash sales of ₦19 000 are 95% of total sales, so total = ₦20 000 and credit sales (5%) = ₦1 000.