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WAEC Financial Accounting 1996 Question 43

Question 43

Final Accounts of a Sole Trader

Stock 1/1/93: N4,500
Sales: N13,500
Purchases: N5,000
Carriage inwards: N500
Stock 31/12/93: N4,200
Returns inwards: N600
Gross Profit is

  1. A.N8,300
  2. B.N8,200
  3. C.N7,700
  4. D.N7,600
  5. E.N7,100.
Show the answer and explanation

Answer: E (N7,100.)

Explanation

Gross profit = net sales − cost of sales = 12,900 − 5,800 = N7,100.