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WAEC Financial Accounting 2007 Question 10

Question 10

Incomplete Records

Opening stock N1,800
Closing stock N1,350
Creditors – 1/01/2004 N1,275
Creditors – 31/12/2004 N1,140
Cash paid to creditors N6,900
Debtors 1/01/2004 N465
Cash received from debtors N11,130
Debtors 31/12/2004 N300
Cost of sales for the year was

  1. A.N10,965
  2. B.N8,565
  3. C.N7,215
  4. D.N6,765.
Show the answer and explanation

Answer: C (N7,215)

Explanation

Purchases = 6,900 + 1,140 − 1,275 = 6,765; cost of sales = 1,800 + 6,765 − 1,350 = N7,215.