Accounting Multiple Choice Question – 31 March 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A firm’s cost of sales for a particular accounting period was £16,000. During the period it earned a gross profit margin of 20% on all goods sold.  The firm‘s sales for the accounting period were?

Select ONE answer:

  1. £13,600
  2. £20,160
  3. £21,000
  4. None of the above.

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – Cost of sales = Sales * 100/ 120. £16,000 = Sales * 100/ 120. Therefore, Sales = £16,000 * 120/ 100 = £19,200. Therefore, none of the answers given is correct.

 

 

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Accounting Multiple Choice Question – 30 March 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A firm’s gross profit margin is 20%. Its mark-up on cost is?

Select ONE answer:

  1. 16 2/3rds %
  2. 22%
  3. 25%
  4. 30%

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct
  2. Not correct
  3. Correct – Gross Profit Margin = Gross Profit as a percentage of selling price = 20%.  Let the selling price = £100.  Therefore, gross profit = £20.  Therefore, cost = £80.  The mark-up on cost = Profit as a percentage of cost price.  £20 / £80 = 25%.
  4. Not correct

 

 

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Accounting Multiple Choice Question – 29 March 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The gross profit margin earned by a shopkeeper who sells all goods at 25% above their cost is?

Select ONE answer:

  1. 20%
  2. 30%
  3. 33 1/3 %
  4. 35%

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. £25.  Selling price = Cost + gross profit = £125 Gross profit Margin = Gross Profit as a percentage of selling price = £25 / £125 = 20%.
  2. Not correct
  3. Not correct
  4. Not correct

 

 

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Accounting Multiple Choice Question – 28 March 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The mark-up on an item which cost £500 and is sold for £625 is?

Select ONE answer:

  1. 20%
  2. 25% 
  3. 33 1/3%
  4. None of the above.

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

  1. Not correct 
  2. Correct – Mark-up (on cost) 2 Gross Profit as a percentage of cost price = (£625 – £500) / £500 = 25%.
  3. Not correct
  4. Not correct

 

 

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Accounting Multiple Choice Question – 27 March 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The gross profit margin earned on an item that cost £500 and is sold for £625 is?

Select ONE answer:

  1. 20%
  2. 25% 
  3. 33 1/3%
  4. None of the above.

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. Correct – Gross Profit Margin = Gross Profit as a percentage of selling price = (£625 — £500) / £625 = 20%.
  2. Not correct
  3. Not correct
  4. Not correct

 

 

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Accounting Multiple Choice Question – 26 March 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Bank charges should initially be recorded . . . . . .?

Select ONE answer:

  1. by debiting the bank charges account and crediting the bank account.
  2. by debiting the bank account and crediting the bank charges account.
  3. in the Cash Book (or Cheque Payments Book).
  4. by debiting the suspense account and crediting the bank account.

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

  1. Not correct – Bank charges. like all other transactions and events, should initially be recorded in a book of original entry and subsequently recorded in the general (nominal) ledger.
  2. Not correct – Bank charges. like all other transactions and events, should initially be recorded in a book of original entry and subsequently recorded in the general (nominal) ledger.
  3. Correct – Bank charges result in the bank balance being reduced. All reductions in the bank balance are initially recorded in the Cash Book (or cheque payments book) and subsequently posted to the nominal (general) ledger.
  4. Not correct – No transaction is ever initially recorded in the suspense account. A suspense account arises only after all transactions have been recorded in the nominal (general) ledger. either directly. or via the books of original entry, and a trial balance prepared which is found to be out of balance.

 

 

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Accounting Multiple Choice Question – 25 March 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

If there is a material (significant) debit balance on a suspense account . . .?

Select ONE answer:

  1. it should be included as an asset in the balance sheet
  2. it should be included as an expense in the profit and loss account.
  3. it should be included as a liability in the balance sheet.
  4. the underlying error(s) should be located and corrected before preparing financial statements.

 

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct – Including a material debit balance on a suspense account as an asset in the balance sheet may overstate assets as the reason for the debit balance on the suspense account may be unrecorded expenses.
  2. Not correct – Including a material debit balance on a suspense account as an expense in the profit and loss account may understate profit as the reason for the debit balance on the suspense account may be unrecorded assets.
  3. Not correct – A debit balance on an account cannot represent a liability. A liability has to be a credit balance. A debit balance can only be either an asset or an expense.
  4. Correct – If the underlying error(s) are not located and corrected before preparing financial statements the financial statements may be materially incorrect (they will be materially incorrect unless some of the errors discovered offset each other).

 

 

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