Accounting Multiple Choice Question – 12 March 2020

The following information relates to a firm’s most recent accounting period.

• Creditors at 1 January £5,000
• Transactions for the period 1 January to 31 December
  • Discount received £500
  • Credit purchases £60,000
  • Payments to suppliers £54,000
  • Cash purchases £7,000
  • Returns outwards £3,500

The balance on the firm’s creditors control account at 31 December was?

Select ONE answer:

1. £1,000
2. £7,000
3. £8,000
4. £13,000

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 2

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

Answer 2:

Cash purchases are not relevant to the creditors control account

Creditors
Dr Discount Received £500
Dr Returns Outwards £3,500
Dr Bank £54,000
Dr Debtors £0
Dr Balance c/d £7,000
Dr Total £65,000
Cr Balance b/d £5,000
Cr Purchases £60,000
Cr Bank £0
Cr Total £65,000

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor View all posts by stuart001uk2014