Day: January 30, 2019

Accounting Multiple Choice Question – 30 January 2019

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

If the total of a business’s sales for the month of May is £400,000 and its gross profit is equal to 20% of its Cost of Sales, then its Cost of Sales for May was ………… ?

Select ONE answer:

  1. £66,667
  2. £80,000
  3. £320,000
  4. £333,333

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
Sales – Cost of Sales = Gross Profit
Sales- Cost of Sales = 20% of the Cost of Sales
£400,000 – Cost of Sales = 20% of the Cost of Sales
£400,000 = Cost of Sales + 20% of the Cost of Sales
£400,000 = 120% of the Cost of Sales = Cost of Sales * 1.2
Cost of Sales = £400,000 / 1.2 = £333,333

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