Accounting Multiple Choice Question – 1 March 2020

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

Over the course of an accounting period, the amount owed to a firm by its debtors increased by £50,000. During the period, credit sales totaled £230,000 and money received from debtors amounted to £190,000. The £10,000 apparent discrepancy could be due to unrecorded . . .

Select ONE answer:

  1. discount allowed
  2. bad debts
  3. sales returns
  4. credit sales

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

  1. Not correct – Recording discount allowed not previously recorded would reduce the balance on the debtor control account.
  2. Not correct – Recording bad debts not previously recorded would reduce the balance on the debtor control account.
  3. Not correct -Recording sales returns not previously recorded would reduce the balance on the debtor control account.
  4. Correct – Based solely on the total of the credit sales (£230,000) and the total amount received from debtors (£190,000) it would appear that debtors increased by £40,000. However, the actual increase is £50,000. Therefore, the correct solution is the one which, when corrected, would increase the balance on the debtor control account.

 

 

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.