Neco Model Questions Vol1 2017 Commerce Question 28
Practice objective / multiple choice question 28 from the 2017 Neco Model Questions Vol1 Commerce examination.
A purchase order was issued for 500 units at a unit price of \(\₦2{,}500\). The supplier applied a trade discount of 12 % on the gross amount. Value‑added tax (VAT) of 5 % is charged on the amount after the trade discount. If payment is made within 10 days, a cash discount of 2 % is allowed on the amount after VAT. The supplier, however, mistakenly applied the cash discount on the gross amount before the trade discount and then added VAT on the amount after the cash discount (but before the trade discount). Calculate: (i) the amount the company should have paid, and (ii) the amount over‑paid because of the invoicing error.
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About This Question
This is Neco Model Questions Vol1 2017 Commerce Question 28. It is one of the objective questions from the 2017 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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