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WAEC Financial Accounting 1997 Question 28

Question 28

Final Accounts of a Sole Trader

A cash discount is a

  1. A.Trading Account item
  2. B.Profit and Loss Account item
  3. C.Appropriation Account item
  4. D.Receipts and Payments Account item
  5. E.Balance Sheet item.
Show the answer and explanation

Answer: B (Profit and Loss Account item)

Explanation

Discounts allowed and received are expense and income items in the profit and loss account.