Month: April 2022

A business with a year-end of 31 December purchased a motor vehicle on 1 January 2018 for £24,000.

The estimated useful life of the motor vehicle was four years and the estimated residual value at the end of four years was £8,000.

The business depreciates motor vehicles at 25% per annum using the reducing balance method.

No depreciation is charged in the year of disposal.

The motor vehicle was sold on 31 July 2021 for £12,000.

What was the profit on the sale of the motor vehicle?

Select ONE answer:

1. £1,875
2. £4,000
3. £5,250
4. £6,000

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 ==> £24,000 * 0.75 * 0.75 * 0.75 ==> £10,125 – £12,000 ==> £1,875 profit
2. Not correct
3. Not correct
4. Not correct

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

The net book value of motor vehicles of a business was as follows:

• 31 December 2017 – £238,000
• 31 December 2018 – £243,000

During the year ended 31 December 2018, a new motor vehicle was purchased for £47,000.

A motor vehicle costing £53,000 with accumulated depreciation £31,000 was sold for £7,000.

What was the depreciation charge for motor vehicles for the year ended 31 December 2018?

Select ONE answer:

1. £11,000
2. £20,000
3. £35,000
4. £42,000

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 ==> £238k – (£53k – £31k) + £47k = £263k – £243k = £20k
3. Not correct
4. Not correct

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

A business has a practice of not conducting a physical count of unused stationery at the year end.

Which accounting concept has been applied for this practice?

Select ONE answer:

1. matching
2. materiality
3. money measurement
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 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.