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JAMB Principles of Accounts 2007 Question 7

Question 7

Branch Accounts

Stock (1/1/02) at selling price ₦2 000
Goods sent to branch (selling price) ₦?
Sales by branch (selling price) ₦4 500
Stock (31/12/02) ₦?
Opening stock is ¼ of goods sent to branch.
Determine the closing stock.

  1. A.₦5 500
  2. B.₦6 500
  3. C.₦2 500
  4. D.₦4 500.
Show the answer and explanation

Answer: A (₦5 500)

Explanation

Closing stock = opening stock + goods sent − sales = 2 000 + 8 000 − 4 500 = ₦5 500.