Month: November 2021

Alex and Bob are in partnership, sharing profits and losses equally.

Alex’s capital account is £6,000 and Bob’s capital account is £5,000. Goodwill is valued at £12,000, but is not shown in the accounts.

They agree to admit Lucy as a new partner and to share profits and losses equally.
What is Alex’s new capital account balance?

Select ONE answer:

1. £4,000
2. £8,000
3. £10,000
4. £12,000

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. 1.Correct ==> £6,000 + (£12,000 / 2) – (£12,000 / 3)
3. Not correct
4. Not correct

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

A company sells goods on sale or return at a mark up of 25 %.

At the Balance Sheet date the following information is available:

•goods in warehouse £300,000 (cost)

•goods sent on sale or return £200,000 (at invoice price)

What will be the value of closing stock in the company accounts?

Select ONE answer:

1. £300,000
2. £450,000
3. £460,000
4. £500,000

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 3

1. Not correct
2. Not correct
3. Correct ==> £200k / 1.25 + £300K
4. Not correct

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

In a period of rising prices, a company has valued its stock of goods using the Last In, First Out (LIFO) basis.

The directors have decided that the stock should be valued using the First In, First Out (FIFO) basis.

What is the effect of the change in the valuation of the stock on the gross and net profits of the company?

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.

Interest charged on a Partner’s Drawings account should be?

Select ONE answer:

1. debited to the Profit and Loss Account
2. credited to the Profit and Loss Account.
3. debited to the Appropriation Account.
4. credited to the Appropriation Account.

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.

In the absence of a partnership agreement the partners claim that they are:

Which claims are correct?

Select ONE answer:

1. 1 and 2
2. 2 and 4
3. 3 and 4
4. 4 and 5

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.