JAMB Accounting 2018 Objective — Question 35

Question 35 of 40 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2018 Objective paper, with the correct answer and a full explanation.

Given: Sales #20,000, Cost of sales #10,000, Operating expenses #2,500, Expenses prepaid included in operating expenses #500. Calculate the net profit

A. #12,500
B. #10,000
C. #8,000Correct
D. #7,500

Explanation

Gross profit = Sales − Cost of sales = 20,000−10,000 = 10,000. Net profit = Gross profit − (Operating expenses − Prepaid) = 10,000−(2,500−500) = 10,000−2,000 = #8,000.

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