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. £3,445
2. £4,470
3. £5,245
4. £6,270 

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 – £125,400 @ 5% = £6,270 – £1,800 = £4,470
3. Not correct
4. Not correct

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

Alex owns a road haulage business.

What would be classified as capital expenditure?

Select ONE answer:

1. purchase of special number plates for new lorries
2. purchase of replacement fuel pump for lorries
3. purchase of replacement tyres for lorries
4. purchase of road tax licence

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

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

From which of the following do revenue reserves arise?

Select ONE answer:

1. the issue of new shares by a company
2. the revaluation of fixed assets
3. the share premium received on shares issued by the company
4. the trading activities of a company

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.

Alex Ltd rents its building to Lucy Ltd.

At 31 December 2019, Lucy Ltd owed £4,500 for rent, but at 31 December 2020 had paid £3,200 in advance.

During the year Alex Ltd had received £17,100 in rental from Lucy Ltd.

What is the rental income to be shown in Alex Ltd’s Profit and Loss Account for the year ended 31 December 2020?

Select ONE answer:

1. £9,400
2. £15,800
3. £18,400
4. £24,800 

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 ==> -£4,500 – £3,200 + £17,100
2. Not correct
3. Not correct
4. Not correct

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

The accounts of a business show: 

1  payments to suppliers

2  prepaid expenses

3  purchases

4  purchases returns

Which items will be debited to accounts in the purchases ledger?

Select ONE answer:

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