Accounting Multiple Choice Question – 15 September 2018

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

In accounting, the term “purchases” means the following…..?

Select ONE answer:

  1. All items bought.
  2. Only goods that are brought on credit.
  3. Only those goods that are brought for resale.
  4. Only those goods that are brought and paid for?

Explain what is meant by buying a good on credit?:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 3 – In accounting, the meaning of the term “purchases” is limited to the purchase of goods which are intended to be resold in the normal course of business which the company hope will be done at a profit. It does not matter whether the goods are paid for or not. Some items which a company buys such as a car or a van may not be intended to be resold in the normal course of business, but used to help conduct the normal business activities and will be treated as a fixed asset.

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