Month: May 2022

A business has provided the following information about its inventory.

• cost price – £18,750
• cost of repairs required to bring the inventory to a saleable condition – £3,750
• selling price after the repairs – £21,000

Which valuation should be used for inventory in the financial statements?

Select ONE answer:

1. £15,000
2. £17,250
3. £22,500
4. £24,750

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 ==> £21,000 – £3,750
3. Not correct
4. Not correct

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

Alex sent goods to Lucy on a sale or return basis at a selling price of £5,000.

His selling price is based on a mark-up of 25%.

Lucy returned goods with a selling price of £1,000 and purchased the remainder.

What was the net effect on Alex’s inventory value?

Select ONE answer:

1. £800 increase
2. £1,000 increase
3. £3,200 decrease
4. £4,000 decrease

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 – (£5k – £1k) = £4k * 0.8 (25% MUP = 20% GM) ==> £3.2K
4. Not correct

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

The following information is available for a business.

The balance on its purchases ledger control account was £5,900.

The total of the balances in its purchases ledger was £5,510.

The following errors were discovered.

1. The purchases journal had been overcast by £250.
2. A sales ledger contra of £340 had been omitted from the purchases ledger control account.
3. A supplier was paid £400 which was correctly entered in the cash book but had been entered in the supplier’s account as £200.

What is the correct value of trade payables?

Select ONE answer:

1. £5,110
2. £5,250
3. £5,310
4. £5,510

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.

A business’s suspense account appears as follows:

discount allowed 150 opening balance 100
sales 50
£150 £150

Which statements are correct?

1 Total debits had been £100 less than total credits in the trial balance.
2 The sales account had been overcast by £50.
3 The discount allowed account had been overcast by £150.

Select ONE answer:

1. 1 and 2
2. 1 only
3. 2 and 3
4. 3 only

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.