Day: September 9, 2022

On 30 September 2015 a business’s current assets totalled £28,000. The next day only two transactions took place.

• Inventory bought for cash. The list price of £2,000 was subject to a trade discount of 20% and a cash discount of 5%. Payment was made immediately.
• A bad debt of £400 was written off.

What was the total of current assets on 2 October 2015?

Select ONE answer:

1. £27,680
2. £28,080
3. £29,520
4. £29,600

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 – £2,000 *0.8 = £1,600 * 0.95 = £1,520 ==> £28,000 – £1,520 + £1,600 – £400
2. Not correct
3. Not correct
4. Not correct

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