Month: May 2021

A fixed asset is purchased on 1 April 2018 at a cost of £240,000.

It has an estimated residual value of £40,000 at the end of its 5 year life and is to be depreciated on the reducing balance basis at the rate of 30 % each year.

What is the depreciation charge for the year ending 31 March 2020 (to the nearest £)?

Select ONE answer:

1. £42,000
2. £50,400
3. £98,000
4. £11,7600

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 ==> £240,000 * 0.3 = £72,000 ==> £168,000 * 0.3 = £50,400
3. Not correct
4. Not correct

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

At the end of a financial period, a business has the following balances.

What should the business do if it wishes to maintain the bad debt provision at 5 % of debtors?

Select ONE answer:

1. decrease the existing provision by £58
2. increase the existing provision by £58
3. decrease the existing provision by £71 
4. increase the existing provision by £71 

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 ==> £10,620 – £260 = £10,360 * 0.05 = £518 – £460 ==> Increase £58
3. Not correct
4. Not correct

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

An item of capital expenditure has been incorrectly treated as revenue expenditure in the accounts of a business.

What is the effect of this error on the accounts of the business? 

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 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.

A business buys a computer for £2,200 on 1 January 2019.

The computer will be used for four years, after which time it will be sold for £280. The business uses the straight-line method of depreciation. 

What is the depreciation charge for the year ended 31 December 2020?

Select ONE answer:

1. £480
2. £550
3. £960
4. £1,100

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 ==> (£2,200 / 4) – £280 = £480 p.a.
2. Not correct
3. Not correct
4. Not correct

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

An item of capital expenditure has been incorrectly treated as revenue expenditure in the accounts of a business.

What is the effect of this error on the accounts of the business? 

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 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.