Accounting Multiple Choice Question – 4 September 2018

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

The following is a list of the assets and liabilities of a firm at a particular date:

  • Premises owned by the firm – £20,000
  • Money owned by the firm to its creditors – £3,000
  • Stock owned by the firm – £8,500
  • Loan received by the firm from a bank – £4,000
  • Cash in the firm’s safe – £100

Which of the following amounts is the firm’s capital at that date is the correct one?

Select ONE answer:

  1. £21,100
  2. £21,600
  3. £32,400
  4. None of the above

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

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

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

The answer is 2:
Assets
– Premises owned by the firm £20,000
– Stock owned by the firm £8,500
– Cash in the firm’s safe £100
– Total Assets – £28,600

Liabilities
– Money owned by the firm to its creditors £3,000
– Loan received by the firm from a bank £4,000
– Total Liabilities – £7,000

Net Assets or Capital = Assets – Liabilities or £28,600 – £7,000 = £21,600

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