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.

Accounting
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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

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Author: stuart001uk2014

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

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