Accounting Multiple Choice Question – 23 August 2020

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

Accounting
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A trader’s purchases on credit for August amounted to £20,000. These purchases were subject to a trade discount of 10% and also a cash discount of 5% for accounts paid within 30 days.

How much was entered in the purchases journal?

Select ONE answer:

  1. £17,000
  2. £18,000
  3. £19,000
  4. £20,000

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 – £20,000 * 0.9 = £18,000 (the value of the supplier invoices), The potential cash discount of £1,000 cannot at this stage be taken into account under the prudence concept / cost concept
  3. Not correct
  4. Not correct

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Author: stuart001uk2014

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

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