WAEC Financial Accounting 2022 Question 25

Question 25

Interpretation of Accounts

Use the following information to answer questions 25 and 26
Sales: GH¢200,000
Purchases: GH¢170,000
Opening stock: GH¢40,000
Closing stock: GH¢50,000
The gross profit percentage is

A.25%
B.20%
C.15%
D.10%

Show the answer and explanation

Answer: B (20%)

Explanation

Cost of sales = 40,000 + 170,000 − 50,000 = 160,000; gross profit 40,000 ÷ 200,000 = 20%.