Question 10
Cash BookGiven:
If Emenike Enterprises settles its suppliers for goods purchased within 7 days, it can earn a cash discount of 12½%. Assuming ₦22,800 worth of goods were purchased and settled within 5 days, what will be the amount to be credited in the cash column of the company's cash book?
- A.₦25,650.
- B.₦22,800.
- C.₦19,950.
- D.₦18,240.
Show the answer and explanation
Answer: C (₦19,950.)
Explanation
Discount = 12½% × 22 800 = 2 850. Cash paid = 22 800 − 2 850 = ₦19 950.