Given: Opening stock: ₦40 000 Purchases: ₦115 000 Closing stock: ₦60 000 Sales:...
Opening stock: ₦40 000
Purchases: ₦115 000
Closing stock: ₦60 000
Sales: ₦250 000
What is the cost of goods sold?
The correct answer is B.
The question is asking about the cost of goods sold. To find the cost of goods sold, we need to subtract the closing stock from the sum of the opening stock and purchases.
In this case, the opening stock is given as ₦40,000 and the purchases are given as ₦115,000. So the total cost of goods available for sale is ₦40,000 + ₦115,000 = ₦155,000.
The closing stock is given as ₦60,000. To find the cost of goods sold, we subtract the closing stock from the total cost of goods available for sale.
So the cost of goods sold is ₦155,000 - ₦60,000 = ₦95,000.
Therefore, the correct answer is Option B: ₦95,000. This represents the cost of goods that were sold during the given period.
It's important to understand the concept of cost of goods sold because it helps businesses calculate their profit. By subtracting the cost of goods sold from the total sales, businesses can determine their gross profit. This information is crucial for financial analysis and decision-making.
Remember to always pay attention to the details given in the question and perform the necessary calculations to arrive at the correct answer.
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