JAMB Accounting 2009 Objective — Question 15

Question 15 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2009 Objective paper, with the correct answer and a full explanation.

15. Adodo Enterprise Profit and Loss Account (Extract): Opening Stock #5,000; Sales #100,000; Purchases ?; Less closing stock #5,600; Cost of goods sold ?; Gross profit ?. If the gross profit margin is 10%, what is the value of the cost of goods sold?

A. #10,000
B. #90,000Correct
C. #105,600
D. #110,000

Explanation

Gross profit = 10% x #100,000 = #10,000. Cost of goods sold = #100,000 - #10,000 = #90,000.

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