JAMB UTME - Principles of Accounts - 2014

Question 1 Report

If goods were bought from Tanko at a cost price of #9,000 with a cash discount of 5%, how much will be paid assuming prompt payment was made?

#4,500

#8,550 Correct answer

#9,000

#9,450

Answer Details

The correct answer is #8,550. When goods are purchased with a cash discount, the amount to be paid can be calculated using the following formula: Net Amount = Gross Amount - Discount In this case, the gross amount is #9,000 and the cash discount is 5%. To calculate the net amount, we first need to determine the discount amount: Discount = Gross Amount x Discount Rate Discount = #9,000 x 0.05 Discount = #450 The net amount can now be calculated using the formula above: Net Amount = Gross Amount - Discount Net Amount = #9,000 - #450 Net Amount = #8,550 Therefore, if prompt payment is made, the amount to be paid is #8,550.

Income and Expenditure (Extract)
	₦		₦
Bal. b/d	390	Expenses	300
Sales of tickets	4,000	New tool	510
Donations	3,000	Repairs	400
Subscriptions	6,500	Electricity	350






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