Accounting Multiple Choice Question – 22 August 2019

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

A firm which purchased five items on credit at a cost of £80 each, less 25% trade discount, is entitled to deduct a cash discount of 5% if it pays for them, in full, within 14 days of the invoice date.

If the firm pays within the above two-week period, it will have to pay:

Select ONE answer:

  1. £260
  2. £280
  3. £285
  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 3

  1. Incorrect
  2. Incorrect
  3. Correct – 5 items @ £80 each = £400 Less 25% trade discount = -£100 Less 5% cash discount (5% of the net cost of £300) = -£15 Equals = £285
  4. Incorrect

 

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