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WAEC Financial Accounting 1998 Question 8

Question 8

Interpretation of Accounts

Debtors: N30,000
Creditors: N20,000
Opening Stock: N15,000
Closing Stock: N18,000
Wages: N3,000
Salaries: N10,000
Purchases: N30,000
Sales: N60,000
The working capital is

  1. A.N48,000
  2. B.N33,000
  3. C.N28,000
  4. D.N25.000
  5. E.N10,000.
Show the answer and explanation

Answer: C (N28,000)

Explanation

Working capital = current assets (debtors 30,000 + closing stock 18,000) − creditors 20,000 = N28,000.