Neco Model Questions Vol1 2025 Financial Accounting Question 24

Practice objective / multiple choice question 24 from the 2025 Neco Model Questions Vol1 Financial Accounting examination.

Neco Model Questions Vol1 2025 Financial Accounting Objective / Multiple Choice Hard Difficulty
Question 24 NECO_MODEL_QUESTIONS_VOL1 • 2025 • FINANCIAL_ACCOUNTING • objective

A trader's books are incomplete. The following information is available:\n\n- Sales: \(\₦200,000\)\n- Purchases: \(\₦120,000\)\n- Opening stock: \(\₦30,000\)\n- Gross profit ratio: 25% of sales\n- Expenses (rent, salaries): \(\₦15,000\)\n- Net profit reported: \(\₦20,000\)\n- Cash sales are 40% of total sales and are collected in the period.\n- Cash purchases are 30% of total purchases; the rest are on credit and paid later.\n\nUsing the above data, determine: (i) the value of closing stock, (ii) the amount of cash sales, and (iii) the amount of any unrecorded expense that must be recognised to reconcile the reported net profit.

Answer Options

A. Closing stock = ₦10,000; Cash sales = ₦60,000; Unrecorded expense = ₦20,000
B. Closing stock = ₦5,000; Cash sales = ₦70,000; Unrecorded expense = ₦10,000
C. Closing stock = ₦15,000; Cash sales = ₦90,000; Unrecorded expense = ₦5,000
Correct Answer D. Closing stock = ₦0; Cash sales = ₦80,000; Unrecorded expense = ₦15,000
Correct Answer
D
Correct Option:
Closing stock = ₦0; Cash sales = ₦80,000; Unrecorded expense = ₦15,000

About This Question

This is Neco Model Questions Vol1 2025 Financial Accounting Question 24. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Financial Accounting examination.

Difficulty level: Hard .

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