Accounting Multiple Choice Question – 7 September 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

The accounting year end of a business is 31 October.

On 1 April the business rents out part of its warehouse for an annual rent of £6,000 receivable in equal instalments on 1 April, 1 July, 1 October and 1 January.

At 31 October what would the final accounts show?

Select ONE answer:

  1. Profit and Loss Account £ rental income 3,500 / Balance Sheet £ current asset 1,000
  2. Profit and Loss Account £ rental income 3,500 / Balance Sheet £ current liability 1,000
  3. Profit and Loss Account £ rental income 4,500 / Balance Sheet £ current liability 1,000
  4. Profit and Loss Account £ rental income 6,000 / Balance Sheet £ current asset 1,500

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 – April £1,500 + July £1,500 + October (£1,500 / 3) ==> therefore October payment Dr Bank £1,500 Cr Rental Income £500 & Current Liability £1,000
  3. Not correct
  4. Not correct

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

%d bloggers like this: