Month: October 2021

A company has the following balances.

trade debtors at 31 December 2020  —  £125,400

provision for doubtful debts at 1 January 2020  —  £1,800

During the year ended 31 December 2020, bad debts of £20,500 were written off.

The company provides for 5% of trade debtors at each year end.

What is the doubtful debts expense for the year ended 31 December 2020?

Select ONE answer:

1. £27,000
2. £28,000
3. £29,000
4. £30,000

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 ==> £150,000 – £10,000 = £140,000 / 5 = £28,000
3. Not correct
4. Not correct

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A company’s trial balance includes a suspense account.

It was found that the only errors were discounts received of £240 and discounts allowed of £312, which had both been entered on the incorrect sides of the respective ledger accounts.

What is the double entry required to clear the Suspense account balance?

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 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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The table shows details relating to a company’s banking transactions at 31 December.

• balance at bank per bank statement  —  £22,650
• uncleared lodgements  —  £3,110
• unpresented cheques  —  £6,290
• bank credit recorded twice by bank in error  —  £650
  

Which balance for cash at bank should appear in the Balance Sheet at 31 December? 

Select ONE answer:

1. £18,820
2. £20,120
3. £25,180
4. £26,480

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 ==> £22,650 – £6,290 + £3,110 – £650
2. Not correct
3. Not correct
4. Not correct

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

A company purchases machinery on hire purchase over four years but does not own the machinery until the final payment has been made.

At the end of year 1 the company shows the machinery in its Balance Sheet as a fixed asset and also records the liability for the amount still owed.

Which accounting principle is being applied?

Select ONE answer:

1. consistency
2. materiality
3. prudence
4. substance over form

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.

Of which concept is the writing off of a bad debt an example?

Select ONE answer:

1. going concern
2. matching
3. prudence
4. substance over form

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
4. Not correct

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