WAEC Financial Accounting 2016 Question 9

Question 9

Cash Book

One of the Purchases invoices of Mr. Dauda showed D96,240 less 12½% trade discount and cash discount of 20%. Since Mr. Dauda paid the amount due within the credit period, the amount paid is

  1. A.D 77,368.
  2. B.D 73,157.
  3. C.D 67,368.
  4. D.D 63,157.
Show the answer and explanation

Answer: C (D 67,368.)

Explanation

Trade discount: 96,240 × 87.5% = 84,210. Cash discount: 84,210 × 80% = D67,368.