Accounting Multiple Choice Question – 28 November 2019

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

Accounting

All expenditure. when incurred. is shown either as a cost of sale or an expense in the profit and loss account or as a fixed asset in the balance sheet.

In deciding where to show the expenditure. which of the following is not relevant.

Select ONE answer:

  1. The improvement value, if any, of the expenditure.
  2. The likelihood of being able to recover the expenditure in future accounting periods.
  3. The date on which the expenditure was incurred.
  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. Not Correct – If the expenditure does not have any improvement value, it is revenue expenditure and should be shown as an expense in the profit and loss account. Otherwise. it should be shown as a fixed asset in the balance sheet.
  2. Not Correct – if there is a doubt as to whether the expenditure can be recovered in future accounting periods then it must be charged as an expense in the profit and loss account (as only assets which provide benefits over a number of years are fixed assets).
  3. Correct
  4. Not Correct

 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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