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WAEC Accounting 2018 Paper

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Question : 11

Total: 50

Tei Ltd offered 1,560 units of magazines at N60 each. Trade discount is 10% and cash discount is 10% within 30 days and 5% within 60 days.

9360
8,424
4680
4212

Solution:

Concept:

A cash discount is calculated on the invoice amount after trade discount has been deducted.

Explanation:

List price

= 1560 \times 60 = \mathrm{N}93{,}600

Trade discount

= 10\%

of

\mathrm{N}93{,}600 = \mathrm{N}9{,}360

Invoice amount after trade discount

= \mathrm{N}93{,}600 - \mathrm{N}9{,}360 = \mathrm{N}84{,}240

For the

5\%

cash discount option: cash discount

= 5\%

of

\mathrm{N}84{,}240 = \mathrm{N}4{,}212

Answer:

D.

\mathrm{N}4{,}212

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