Gce Model Questions Vol1 2020 Financial Accounting Question 50

Practice objective / multiple choice question 50 from the 2020 Gce Model Questions Vol1 Financial Accounting examination.

Gce Model Questions Vol1 2020 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 50 GCE_MODEL_QUESTIONS_VOL1 • 2020 • FINANCIAL_ACCOUNTING • objective

The following ledger extracts relate to purchases for the year. **Opening Inventory** (debit side) \(\text{₦}40{,}000\) **Purchases Ledger** - 5 Jan: Purchases on credit \(\text{₦}120{,}000\) (debit) - 20 Jan: Purchase Returns \(\text{₦}15{,}000\) (credit) - 10 Feb: Purchases cash \(\text{₦}30{,}000\) (debit) - 25 Feb: Purchase Returns \(\text{₦}5{,}000\) (credit) The income statement shows Cost of Goods Sold (COGS) of \(\text{₦}150{,}000\). Determine: (a) The closing inventory amount. (b) The closing balance of the Purchases ledger (i.e., net purchases).

Answer Options

Correct Answer A. Closing inventory: ₦20,000; Net purchases (closing balance of Purchases ledger): ₦130,000
B. Closing inventory: ₦25,000; Net purchases (closing balance of Purchases ledger): ₦135,000
C. Closing inventory: ₦15,000; Net purchases (closing balance of Purchases ledger): ₦125,000
D. Closing inventory: ₦10,000; Net purchases (closing balance of Purchases ledger): ₦120,000
Correct Answer
A
Correct Option:
Closing inventory: ₦20,000; Net purchases (closing balance of Purchases ledger): ₦130,000

About This Question

This is Gce Model Questions Vol1 2020 Financial Accounting Question 50. It is one of the objective questions from the 2020 Gce Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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