Month: November 2021

Motor vehicles purchased for £530 000 at the start of the year have been incorrectly depreciated for the whole year using the straight line method at 10% instead of 25%.

Ledger balances after the entries have been posted:

• motor vehicles at cost £530 000
• provision for depreciation £53 000

Which entries will correct the error?

Select ONE answer:

1. debit Profit & Loss £79 500; credit Provision for Depreciation of Motor Vehicles £79 500
2. debit Profit & Loss £132 500; credit Provision for Depreciation of Motor Vehicles £132 500
3. debit Provision for Depreciation of Motor Vehicles £79 500; credit Profit & Loss £79 500
4. debit Provision for Depreciation of Motor Vehicles £132 500; credit Profit & Loss £132 500

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 – Dr I/S Cr B/S Provision ==> £530k * 0.25 ==> £132.5 – £53k ==> £79.5 debit P&L
2. Not correct
3. Not correct
4. Not correct

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A Suspense account has a balance of £450 debit.

What has caused this balance in the Suspense account?

Select ONE answer:

1. motor expenses of £225, correctly entered in the cash book, and posted to Motor Expenses as a credit
2. motor expenses of £225, entered in the cash book as a receipt and posted to Motor Expenses as a credit
3. motor expenses of £450, correctly entered in the cash book, and posted to Motor Vehicles as a debit
4. motor expenses of £675, entered in the cash book as a credit of £225 and posted to Motor Expenses as £225 debit

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.

The following information is extracted from the books of a company.

• Freehold premises at cost – £150,000
• Provision for depreciation of freehold premises – £100,000
• The premises are revalued at – £300,000.

Which entries are required in the company’s books to record the revaluation?

Select ONE answer:

1. Profit and Loss Account debit £0 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £250,000
2. Profit and Loss Account debit £100,000 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £250,000
3. Profit and Loss Account debit £100,000 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £300,000
4. Profit and Loss Account debit £0 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £300,000

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 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.

What is an example of the application of the generally accepted accounting practice of applying the practice of accounting entries that show the substance over form for a true and fair view (De facto vs De Jure)?

Select ONE answer:

1. accounting for stock losses
2. recording an asset acquired under a hire purchase agreement as a fixed asset
3. recording the premium on the issue of ordinary shares in a share premium account
4. writing off a debt from a customer in liquidation

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.

Businesses anticipate losses but not profits in preparing their annual accounts.

Which accounting concept is being applied here?

Select ONE answer:

1. accruals
2. consistency
3. going concern
4. prudence

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.