Accounting Multiple Choice Question – 13 May 2020

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

apple devices books business coffee
Photo by Serpstat on Pexels.com

In the balance sheet of a limited company, the profit and loss account balance is shown under the heading. . .?

Select ONE answer:

  1. current liabilities
  2. fixed assets
  3. current assets
  4. capital and reserves

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 – Current liabilities are liabilities which are due to be discharged within one year.
  2. Not correct – Fixed assets are assets which have an expected useful economic life of more than one year and were purchased in order to be used on a continuing basis rather than solely for resale.
  3. Not correct – Current assets are cash and positive bank balances and other assets likely to be converted into cash or bank balances within a year as a result of normal trading operations.
  4. Correct – The company is being financed, in part, by the amount of its retained profit.

 

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