Question

A merchant sends out his goods casually to his dealers on approval basis. All such transactions are, however, recorded as actual sales and are passed through the sales book. At the end of the accounting period, it was found that 100 articles at a sale price of 400 each sent on approval bases were recorded as actual sales at that price. The sale price was made at cost plus 25%. The amount of stock on approval will be:

a)32,000.

b)40,000.

c)30,000.

Answer 1

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