Accounting Multiple Choice Question – 31 March 2021

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

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When a company calculates the net present value of proposed capital expenditure, which rate does it use to discount annual income and expenditure?

Select ONE answer:

  1. cost to the company of providing the initial outlay
  2. current rate of inflation
  3. rate of interest payable on a bank overdraft
  4. rate which will give the highest net present value

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

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Accounting Multiple Choice Question – 30 March 2021

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

apple devices books business coffee
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Which item should be treated as capital expenditure?

Select ONE answer:

  1. the addition of a back-up system on an existing computer at a cost of £900
  2. costs incurred in repairing a car when the costs cannot be recovered from the insurance company
  3. rent paid on a factory, whilst the company negotiated the purchase of that same factory
  4. the replacement of a wooden fence with a new fence

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

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

Accounting Multiple Choice Question – 29 March 2021

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

apple devices books business coffee
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A company has a product which sells for £1 per unit. The variable costs are £0.60 per unit, and production of 200,000 units is planned.

Fixed costs are £0.20 per unit at the budgeted production level. 

What is the break-even level?

Select ONE answer:

  1. 40,000 units
  2. 66,667 units
  3. 100,000 units 
  4. 160,000 units

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 ==> (£1 – £0.6 = £0.4 CM) ==> £0.2 / £0.4 = 50% @ 200,000 units = 100,000 units BEP
  4. Not correct

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

Accounting Multiple Choice Question – 28 March 2021

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

The following data below is relevant to a business. 

What is the amount of overhead under-absorbed?

Select ONE answer:

  1. £7,500
  2. £8,000
  3. £10,000
  4. £17,500

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
  2. Not correct
  3. Not correct
  4. Correct ==> (£150,000 / 10,000) = £15 * 9,500 hours ==> £142,500 – £160,000 = £17,500 ADV

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

Accounting Multiple Choice Question – 27 March 2021

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

What do the break-even charts show regarding the profitability of and risk attaching to products 1 and 2?

Select ONE answer:

  1. Profitability – 1 is greater  /  Risk – 1 is greater
  2. Profitability – 1 is greater  /  Risk – 1 is less
  3. Profitability – 2 is greater  /  Risk – 2 is greater
  4. Profitability – 2 is greater  /  Risk – 2 is less

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

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

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