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WAEC Financial Accounting 2014 Question 40

Question 40

Interpretation of Accounts

A company made a net profit of ₦2,000,000 for the year and its net profit percentage is 25%. What is the total sales for the year?

  1. A.₦8,000,000
  2. B.₦6,000,000
  3. C.₦800,000
  4. D.₦500,000
Show the answer and explanation

Answer: A (₦8,000,000)

Explanation

Net profit percentage = net profit ÷ sales × 100, so sales = 2,000,000 ÷ 0.25 = ₦8,000,000.