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JAMB Principles of Accounts 2014 Question 18

Question 18

Cash Book

If goods were bought from Tanko at a cost price of ₦9,000 with a cash discount of 5%, how much will be paid assuming prompt payment was made?

  1. A.₦4,500.
  2. B.₦8,550.
  3. C.₦9,000.
  4. D.₦9,450.
Show the answer and explanation

Answer: B (₦8,550.)

Explanation

Discount = 5% × 9 000 = 450, so payment = 9 000 − 450 = ₦8 550.