Accounting Multiple Choice Question – 23 February 2020

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

At 31 December the balance on a firm’s bank statement was £1,000 overdrawn. At the same date, outstanding cheques amounted to £3,000, outstanding lodgements amounted to £5,000 and there was a dishonoured cheque from a customer of £500 entered on the firm’s bank statement but not yet entered in the bank account in the firm’s ledger.

The balance brought down on the bank account in the firm’s ledger was?

Select ONE answer:

  1. £500 debit
  2. £500 credit
  3. £1,000 credit
  4. £1,500 debit

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

  1. Correct
    Computation of Correct Ledger Balance as at 31 December
    Balance per bank statement -£1,000
    Outstanding lodgements £5,000
    Cheques not presented -£3,000
    Balance per ledger (corrected) £1,000

    However, as the dishonoured cheque has not yet been entered in the ledger, the actual ledger balance exceeds the correct ledger balance by £500. Therefore, the actual ledger balance is £500 debit.

  2. Not Correct
  3. Not correct
  4. Not correct

 

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