Accounting 2024 – Question 1

Q: Accounting 2024 – Question 1

Accounting 2024 - Question 1 ₦Stock 1/1/092200Purchases18000Sales27000Salaries1500Reduction in doubtful debts500Office expenses1100Other expenses1300stock 31/12/091000 The cost of goods sold is ₦21,200 ₦20,200 ₦19,200 ✓ ₦18,800 Explanation Cost of Goods Sold (COGS) measures how much a business spent on the products it actually sold. To find this amount, we use a simple formula: Opening Stock + Purchases - Closing Stock. From the data given: Opening Stock on 1st January 2009 is ₦2,200. Purchases during the year total ₦18,000. Closing Stock on 31st December 2009 is ₦1,000. Calculation: ₦2,200 + ₦18,000 - ₦1,000 = ₦19,200. The opening stock and purchases together show all goods available for sale (₦20,200). Subtracting the closing stock (goods left unsold) gives us the cost of what was actually sold. Remember: Sales revenue, salaries, and other expenses are not part of COGS. Those items appear in other parts of the financial statements.

JAMB Accounting 2024 Medium 👁 8 views

	₦
Stock 1/1/09	2200
Purchases	18000
Sales	27000
Salaries	1500
Reduction in doubtful debts	500
Office expenses	1100
Other expenses	1300
stock 31/12/09	1000

The cost of goods sold is

₦21,200
₦20,200
₦19,200 ✓
₦18,800

Explanation

Cost of Goods Sold (COGS) measures how much a business spent on the products it actually sold. To find this amount, we use a simple formula: Opening Stock + Purchases – Closing Stock.

From the data given: Opening Stock on 1st January 2009 is ₦2,200. Purchases during the year total ₦18,000. Closing Stock on 31st December 2009 is ₦1,000.

Calculation: ₦2,200 + ₦18,000 – ₦1,000 = ₦19,200. The opening stock and purchases together show all goods available for sale (₦20,200). Subtracting the closing stock (goods left unsold) gives us the cost of what was actually sold.

Remember: Sales revenue, salaries, and other expenses are not part of COGS. Those items appear in other parts of the financial statements.