JAMB Accounts Principles of Accounts 2011 Paper

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Question : 9

Total: 49

Use the information below to answer question .

Adamu Stores bought accessories from Mu'azu Beverages for N400 on credit. A trade discount of 10% and a cash discount of 15% were provided.

Calculate the cash discount?

N60
N90
N40
N100

Solution:

Concept:

Cash discount is calculated on the amount payable after trade discount has been deducted.

Explanation:

The goods were bought for N400, and A trade discount of 10% has already reduced the price to the amount payable.

Therefore, cash discount is 15% of N400.

\text{Cash discount} = \frac{15}{100} \times 400 = 60

Answer:

N60.

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