Month: March 2021

The graph below shows the way in which a cost increases according to the level of activity of the business.

Which cost follows this pattern?

Select ONE answer:

1. administrative salaries
2. commission on sales
3. depreciation of factory
4. office rent

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.

Which of the following is always included in prime cost? 

Select ONE answer:

1. carriage outwards
2. depreciation of machinery
3. opening work-in-progress
4. royalties on production

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

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

Which of the following actions would improve the liquidity (acid test) ratio of a business in the short term? 

Select ONE answer:

1. 1 and 2
2. 2 and 3
3. 1 and 4
4. 3 and 4

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

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

The following items below appear on a Balance Sheet. 

The current ratio is 2 : 1.

How much are the debtors? 

Select ONE answer:

1. £4,000
2. £6,000
3. £8,000
4. £10,000

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 3

1. Not correct
2. Not correct
3. Correct ==> (£10K + £4K – £2K) + x / £10k = 2 : 1 ==> x = £8k
4. Not correct

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

An extract from a company’s Balance Sheet is given below. 

What is the quick (acid test) ratio?

Select ONE answer:

1. 1.8  :  1
2. 2.2  :  1
3. 2.7  :  1
4. 3.5  :  1

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 – (7,400 + 2,500) / (1,000 + 4,500) = 1.8
2. Not correct
3. Not correct
4. Not correct

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