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WAEC Financial Accounting 1995 Question 10

Question 10

Final Accounts of a Sole Trader

Use the following information:
Sales: ₦45,000
Opening stock: ₦20,000
Closing stock: ₦30,000
Expenses: ₦15,000
Fixed Assets: ₦40,000
Debtors: ₦10,000
Creditors: ₦5,000
Purchases: ₦25,000

Net profit is

  1. A.₦45,000
  2. B.₦30,000
  3. C.₦25,000
  4. D.₦20,000
  5. E.₦15,000.
Show the answer and explanation

Answer: E (₦15,000.)

Explanation

Gross profit 45,000 − 15,000 = 30,000; net profit 30,000 − expenses 15,000 = ₦15,000.