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WAEC Financial Accounting 2015 Question 20

Question 20

Final Accounts of a Sole Trader

The cost of putting goods into a saleable condition is charged to

  1. A.balance sheet.
  2. B.trial balance.
  3. C.profit and loss account.
  4. D.trading account.
Show the answer and explanation

Answer: D (trading account.)

Explanation

Costs of getting goods ready for sale (e.g. carriage inwards, packing to make saleable) are part of cost of sales in the trading account.