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WAEC Financial Accounting 1991 (August) Question 47

Question 47

Incomplete Records

1/1/86: Creditors ₦5,000; Stock ₦1,200
31/12/86: Creditors ₦8,000; Stock ₦1,100
Mark-up: 25%
Cash paid to creditors: ₦7,000

Purchases for the year amounted to

  1. A.₦10,000
  2. B.₦8,000
  3. C.₦7,000
  4. D.₦6,900
  5. E.₦5,000
Show the answer and explanation

Answer: A (₦10,000)

Explanation

7,000 + 8,000 − 5,000 = ₦10,000.