Neco Model Questions Vol1 2019 Financial Accounting Question 32

Practice objective / multiple choice question 32 from the 2019 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2019 Financial Accounting Objective / Multiple Choice Medium Difficulty
Question 32 NECO_MODEL_QUESTIONS_VOL1 • 2019 • FINANCIAL_ACCOUNTING • objective

The trade receivables control account for a company shows an opening balance of \(\N150,000\). During the month credit sales of \(\N320,000\) were made and sales returns amounted to \(\N20,000\). Customers are allowed a 2 % cash discount if they pay within the discount period. Cash receipts from credit customers total \(\N294,000\). Cash sales for the month are \(\N80,000\). Determine (a) the amount of discount allowed, and (b) the closing balance of the trade receivables control account.

Answer Options

A. Discount allowed = \N6,400; Closing trade receivables balance = \N155,600.
B. Discount allowed = \N4,800; Closing trade receivables balance = \N157,200.
Correct Answer C. Discount allowed = \N6,000; Closing trade receivables balance = \N156,000.
D. Discount allowed = \N5,880; Closing trade receivables balance = \N156,120.
Correct Answer
C
Correct Option:
Discount allowed = \N6,000; Closing trade receivables balance = \N156,000.

About This Question

This is Neco Model Questions Vol1 2019 Financial Accounting Question 32. It is one of the objective questions from the 2019 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Medium .

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