Accounting Multiple Choice Question – 4 March 2023

A company transfers manufactured items from factory to warehouse at cost plus 10 %.

This year the transfer value was £93,500 and at the end of the year the closing inventory was 20 % of the year’s production.

How will the inventory of finished goods be shown in the Income Statement and Statement Of Financial Position?

Select ONE answer:

1. Trading account and Income Statement £17,000 & Statement Of Financial Position £17,000
2. Trading account and Income Statement £18,700 & Statement Of Financial Position £16,830
3. Trading account and Income Statement £18,700 & Statement Of Financial Position £17,000
4. Trading account and Income Statement £17,000 & Statement Of Financial Position £18,700

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 = £93,500 / 110 = 850 *100 * 0.2 = £17,000 SOFP * 1.1 = £18.700 IS
4. Not correct

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