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WAEC Financial Accounting 2004 Question 19

Question 19

Final Accounts of a Sole Trader

Purchases N2,000
Opening stock N900
Closing stock N300
Sales N3,850
Gross profit is

  1. A.N1,850
  2. B.N1,250
  3. C.N950
  4. D.N650
Show the answer and explanation

Answer: B (N1,250)

Explanation

Cost of sales = 900 + 2,000 − 300 = 2,600; 3,850 − 2,600 = N1,250.