Month: November 2020

What does the Profit and Loss Appropriation Account of a limited company show?

Select ONE answer:

1. capital and revenue reserves
2. how net profit is applied
3. how net profit is earned
4. the directors’ salaries

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

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

A company increases its provision for doubtful debts.

How does this affect the cash flow statement?

Select ONE answer:

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

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

A manufacturing company transfers its products from factory to warehouse at cost of production plus 20%.

The following information is available.

Provision for unrealised profit brought forward at 1 October 2019   £18,000

Closing stock of finished goods at 30 September 2020                   £96,000

What is shown in the Profit and Loss Account for the year ended 30 September 2020 for the provision for unrealised profit?

Select ONE answer:

1. £1,200 credit
2. £1,200 debit
3. £2,000 credit
4. £2,000 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 3

1. Not correct
2. Not correct
3. Correct = £96k/ 1.2 = £80k * 20% = £16k provision required only so £2k credit to P&L account
4. Not correct

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

A partnership does not maintain a Goodwill account. It recently admitted a new partner.

No adjustments were made for Goodwill in the partners’ Capital accounts.

What is the effect of this omission? 

Select ONE answer:

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

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

A partnership maintains both capital and current accounts for its partners.

Which is the correct accounting entry for recording interest on capital for partner X?

Select ONE answer:

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

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