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WAEC Financial Accounting 2023 Question 8

Question 8

Final Accounts of a Sole Trader

Use the following information to answer questions 7 to 9.
The following transactions relate to Osei Enterprises for the year ended 31st December, 2020:
Purchases: D 160,000
Returns outwards: D 880
Carriage inwards: D 740
Returns inwards: D 620
Sales: D 195,000
Salaries: D 27,600
Closing stock: D 14,100
The gross profit is

  1. A.D 49,360.
  2. B.D 49,220.
  3. C.D 48,620.
  4. D.D 45,860.
Show the answer and explanation

Answer: C (D 48,620.)

Explanation

Net sales 194,380 − cost of sales (159,860 − 14,100 = 145,760) = D 48,620.