If sales is D 12,000 and the gross profit mark -up percentage is 25%. What is the cost of sales?
D 2,400
D 9,000
D 9,600
D 3,000
Correct answer is B
Calculate the gross profit using the gross profit mark-up percentage:
Gross Profit = Sales Amount * (Gross Profit Mark-up Percentage / 100)
Gross Profit = D12,000 * (25 / 100)
Gross Profit = D12,000 * 0.25
Gross Profit = D3,000
Calculate the cost of sales by subtracting the gross profit from the sales amount:
Cost of Sales = Sales Amount - Gross Profit
Cost of Sales = D12,000 - D3,000
Cost of Sales = D9,000
Therefore, the cost of sales is D9,000.
Carriage inwards on raw materials is recorded in the
Balance sheet
Profit and loss account
Trading account
Manufacturing account
Correct answer is D
Carriage inwards on raw materials is recorded in the manufacturing account. It is added to the opening stock of raw materials and purchase of raw materials.
Which of the following items is found in the profit and loss account of a company?
Proposed dividends
Transfer to general reserves
Director's remuneration
Proceeds from issue of shares
Correct answer is A
Proposed dividends (ordinary) is shown on the debit side of the profit and loss appropriation account of a company.
The error that affects the agreement of a trial balance totals is
Error of commission
Undercasting
Compensating error
Error of principle
Correct answer is B
The errors that will affect the agreement of the trial balance are: one sided omission, two entries on the same side, undercasting or overcasting of balances etc.
Wages of machine operators in manufacturing account are treated as
Indirect expenses
Direct expenses
Direct labour
Indirect labour
Correct answer is C
Direct labour are cost of labour services which are easily and directly traceable to the creation of a product e.g wages of operators, assembly line workers wages etc.