Day: July 13, 2022

A manufacturer has paid £3,000 for electricity from his private bank account.

The electricity charges are apportioned as follows:

• factory – 50%
• sales office – 10%
• private – 40%

Which entries for electricity are necessary in the business accounts?

Select ONE answer:

1. factory credit £1,000 / sales office credit £200 / capital account debit £1,200
2. factory credit £1,500 / sales office credit £300 / capital account debit £1,800
3. factory debit £1,000 / sales office debit £200 / capital account credit £1,200
4. factory debit £1,500 / sales office debit £300 / capital account credit £1,800

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 – £3,000 * 0.5 = £1,800; £3,000 * 0.1 = £300 ==> Dr Electricity £1,800 Cr Capital £1,800

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