Month: March 2022

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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Alex’s business has extracted the following information from its books of account at 31 December 2021, which is its first year of trading.

• carriage inwards – £12k
• carriage outwards – £15k
• closing inventory – £86k
• purchases – £286k
• returns inwards – £5k
• returns outwards – £2k
• revenue – £524k

What is the gross profit for the year ended 31 December 2021?

Select ONE answer:

1. £301,000
2. £309,000
3. £320,000
4. £328,000

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. Correct ==> (£524k – £5k) – (£0 + £286k – £2k – £86k + £12k)
3. Not correct
4. Not correct

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

A trader has suffered inventory losses due to theft during the year.

What is necessary to calculate the value of the inventory stolen?

1 amounts banked for sales and spent on purchases
2 amounts spent for business expenses
3 inventory at the beginning and end of the year
4 percentage of mark-up on purchase price

Select ONE answer:

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

1. Not correct
2. Not correct
3. Correct
4. Not correct

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

Lucy provided the following financial information for the year ended 31 December 2021

• purchases – £95,000
• returns inwards – £3,300
• returns outwards – £2,100
• inventory withdrawn for personal use – £4,000
• Inventory on 31 December 2021 was valued at £1,000 more than on 1 January 2021.

What was the cost of sales?

Select ONE answer:

1. £85,700
2. £87,900
3. £89,000
4. £97,100

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 ==> £0 + £95,000 – £1,000 – £2,100 – £4,000
3. Not correct
4. Not correct

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