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WAEC Financial Accounting 2004 Question 14

Question 14

Final Accounts of a Sole Trader

Which of the following is correct about cost of goods sold?

  1. A.Opening stock + purchases - closing stock
  2. B.Opening stock + sales - closing stock
  3. C.Opening stock - purchases - closing stock
  4. D.Opening stock + sales + closing stock.
Show the answer and explanation

Answer: A (Opening stock + purchases - closing stock)

Explanation

Cost of goods sold = opening stock + purchases − closing stock.