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JAMB Principles of Accounts 2010 Question 14

Question 14

Final Accounts of a Sole Trader

Sales ₦10,900
Stock 1/1 ₦1,000
Stock 31/12 ₦2,000
Purchases ₦4,000
Returns outwards ₦800
Returns inwards ₦600
Carriage outwards ₦300
Carriage inwards ₦200
Find the gross profit.

  1. A.₦7 800
  2. B.₦7 900
  3. C.₦9 700
  4. D.₦5 700.
Show the answer and explanation

Answer: B (₦7 900)

Explanation

Net sales = 10 900 − 600 = ₦10 300. Cost of sales = 1 000 + 4 000 − 800 + 200 − 2 000 = ₦2 400. Gross profit = ₦7 900 (carriage outwards goes to profit and loss).