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.

Accounting
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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

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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