Day: March 10, 2022

Accounting Multiple Choice Question – 10 March 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

apple devices books business coffee
Photo by Serpstat on Pexels.com

Alex and Lucy have been in partnership sharing profits and losses in the ratio of 3 : 2.

The balances on the partners’ capital accounts at 31 December 2021 are shown.

Alex – £32,000
Lucy – £18,000

The partners decided to share profits and losses equally with effect from 1 January 2022.

There was no goodwill account in the books.

Goodwill is valued at £30,000 and is not to be retained in the books of account.

What is the balance on Alex’s capital account after the adjustment for goodwill on 1 January 2022?

Select ONE answer:

  1. £15,000
  2. £18,000
  3. £35,000
  4. £50,000

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 ==> (£30k / 5 * 3 = £18k at 31 December 2021) – (£30k / 2 = £15K at 1 January 2022) —– > Increase of £3k to £35k
  4. Not correct

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