Accounting Multiple Choice Question – 30 April 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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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

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Author: stuart001uk2014

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

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