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JAMB Principles of Accounts 2007 Question 50

Question 50

Cash Book

A sole trader purchased goods in cash worth ₦2 000 at 2% discount and made a cash sale ₦1 000 at the same rate of discount. Determine the amount of discount allowed.

  1. A.₦20
  2. B.₦40
  3. C.₦400
  4. D.₦200.
Show the answer and explanation

Answer: A (₦20)

Explanation

Discount allowed is given on the sale: 2% × 1 000 = ₦20. The ₦40 on the purchase is discount received.