Month: December 2023

Accounting Multiple Choice Question – 6 December 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Which actions would improve the liquidity (acid test) ratio of Alex Trading Ltd in the short term?

  • receivables paying their debts
  • delaying paying payables
  • selling a number of surplus non-current assets
  • selling inventory

Select ONE answer:

  1. 1 and 2
  2. 2 and 3
  3. 1 and 4
  4. 3 and 4

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

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Accounting Multiple Choice Question – 5 December 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Assets and liabilities of Alex Trading Ltd at its year end include the following information.

  • accruals – £5,000
  • bank overdraft – £6,800
  • cash – £600
  • prepayments – £4,500
  • proposed dividend – £12,000
  • Inventory – £51,800
  • trade payables – £20,100
  • trade receivables – £24,200

What is the current ratio?

Select ONE answer:

  1. 0.67 : 1
  2. 1.85 : 1
  3. 2.19 : 1
  4. 2.54 : 1

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 – (£51,800 + £24,200 + £4,500 + £600) / (£5,000 + £6,800 + £12,000 + £20,100) == > £81,100 / £43,900 == > 1.85 : 1
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 4 December 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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At the beginning of the year Alex Trading plc has authorised share capital of 800,000 ordinary shares of £0.25 each and an issued share capital of 400,000 ordinary shares of £0.25.

During the year, Alex Trading plc makes a further issue of 200,000 ordinary shares at a price of £0.60.

What is the balance on the share capital account at the end of the year?

Select ONE answer:

  1. £150,000
  2. £22,0000
  3. £250,000
  4. £350,000

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 – (400,000 * £0.25) + (200,000 * £0.25)
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 3 December 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

A shareholder sells some ordinary shares for more than he paid for them.

What is the effect on the company statement of financial position?

Select ONE answer:

  1. ordinary share capital – Decrease and share premium account – Decrease
  2. ordinary share capital – Decrease and share premium account – Increase
  3. ordinary share capital – No effect and share premium account – Decrease
  4. ordinary share capital – No effect and share premium account – No effect

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

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

Accounting Multiple Choice Question – 2 December 2023

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Olya Kobruseva on Pexels.com

Alex Ltd’s income statement includes:

  • dividend – £300k
  • increase in inventory – £200k
  • Overheads – £400k
  • purchases – £800k

If the profit percentage as a relation to revenue is 20%, what is the figure for sales?

Select ONE answer:

  1. £1,120,000
  2. £1,250,000
  3. £1,625,000
  4. £1,750,000

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 – the method to reach the sales figure is to calculate the expenses (£800k less £200k plus £400k = £1M) and gross it up by 100/80 to get £1,250k
  3. Not correct
  4. Not correct

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