Accounting Multiple Choice Question – 10 February 2019

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

The following information relates to a sole trader

  • Total of all assets at 1 June – £2,300
  • Total of all liabilities at 1 June – £2,500
  • Net profit earned during June – £1,000
  • Capital introduced during June – £5,000
  • Drawings during June – £700

Select ONE answer:

  1. £5,100
  2. £5,300
  3. £5,500
  4. £5,600

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

  • Capital = Assets – Liabilities (as per the Accounting Equation)
  • Capital at 1 June = Total Assets at 1 June + Total Liabilities at 1 June i.e. -£200 = £2,300 + (-£2,500)
  • Capital at 30 June = Capital at 1 June + Capital introduced during June + Net profit earned during June – Drawing during June i.e. -£200 +£5,000 + £1,000 – £700 = £5,100

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