Accounting Multiple Choice Question – 31 July 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Given below are extracts from a company’s Profit and Loss Account and Statement Of Financial Position for last year.

                                                                    Profit and Loss Account £000 
  • profit before interest and tax – £200k
  • interest paid – £(20)k
  • net profit before taxation – £180k
  • taxation – £(60)k
  • dividends – £(10)k
  • retained profit for year – £110k
                                                                    Statement Of Financial Position £000 
  • Total assets – £1 000k
  • long term loan – (£100)k
  • Net current assets – £900k
  • share capital and reserves – £900k

What is the return on total capital employed?

Select ONE answer:

  1. 18%
  2. 20%
  3. 22.2%
  4. 25.7%

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 ==> Profit before interest and tax / Capital Employed (Share capital & reserves + NCL) = £200k / £1,000k = 20%
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 30 July 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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A company’s gross profit ratio for the year ended 31 December 2020 was 25%.

This increases to 30% for the year ended 31 December 2021.

What could have been responsible for the increase?

Select ONE answer:

  1. an increase in the cost of purchases during 2021
  2. an increase in the volume of sales during 2021
  3. an over-valuation of stock at 31 December 2021
  4. an under-valuation of stock at 31 December 2021

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 ==> Higher Value Of Stock means Lower COS, therefore higher GM
  4. Not correct

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Accounting Multiple Choice Question – 29 July 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

apple devices books business coffee
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Which accounting ratio is used to assess working capital management?

Select ONE answer:

  1. gross profit ratio
  2. net profit ratio
  3. return on capital employed
  4. stock turnover ratio

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 4

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

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Accounting Multiple Choice Question – 28 July 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A business increases its provision for doubtful debts.

What is the effect on the current and acid test ratios?

Select ONE answer:

  1. current ratio decrease / acid test ratio decrease
  2. current ratio decrease / acid test ratio no change
  3. current ratio no change / acid test ratio decrease
  4. current ratio no change / acid test ratio no change

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
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 27 July 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

apple devices books business coffee
Photo by Serpstat on Pexels.com

A company with an issued share capital of £200 000 of £1.00 ordinary shares makes a bonus issue of one £1.00 ordinary share for every five already held.

It also issues £80 000 debentures at a discount of 5%.

The company has a bank balance of £40 000 before the issues.

What is the bank balance after the issues?

Select ONE answer:

  1. £76 000
  2. £116 000
  3. £120 000
  4. £166 000

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 ==> £40,000 + £80,000 * 0.95
  3. Not correct
  4. Not correct

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

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