Accounting Multiple Choice Question – 13 October 2021

On the company’s accounting date, the accountant writes cheques to pay creditors and records them in the books immediately.

The cheques are then deliberately retained by the accountant for two weeks.

What effect does this have on the Balance Sheet?

Select ONE answer:

1. the accounts show a higher figure for cash
2. the accounts show a lower figure for creditors
3. to improve the company’s cash flow
4. to improve the company’s gearing

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

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