Month: March 2024

Accounting Multiple Choice Question – 31 March 2024

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

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Alex plc commenced trading on 1 April 2013.

The carrying amount of plant and equipment in Alex plc’s financial statements as at 31 March 2015 was £399,960.

The cost of these assets was £614,500.

On 31 March 2016, an asset costing £11,500 was acquired.

Depreciation is charged on plant and equipment monthly at an annual rate of 25% straight line. There are no residual values.

The carrying amount of Alex plc’s plant and equipment in its statement of financial position at 31 March 2016 is?

Select ONE answer:

  1. £254,960
  2. £257,835
  3. £299,970
  4. £308,595

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 – This is calculated using T accounts, the carrying amount being £626,000- £368,165 – £257,835. Note that no depreciation will be charged in the year to 31 March 20X6 for the asset acquired at the year-end.
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 30 March 2024

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

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Alex plc includes profits and losses on disposal of non-current assets in administrative expenses in its income statement.

Alex plc’s policy is for depreciation to be charged on fixtures and fittings at 20% using the reducing balance method.

On 1 July 2016, some fixtures that cost £4,000 on 1 July 20X3 were sold for £150.

In the administrative expenses account Alex plc must?

Select ONE answer:

  1. Debit £1,450
  2. Credit £1,450
  3. Debit £1,898
  4. Credit £1,898

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 – The debit to administrative expenses is the loss on disposal of £1,898. Cost £4,000 – Acc depn (£4,000 – (£4,000 x 0.8 x 0.8 x 0.8)) £1,952 – Proceeds £150 = Loss of £1,898 i.e. debit to administrative expenses
  4. Not correct

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Accounting Multiple Choice Question – 29 March 2024

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

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On 1 April 2015 Alex plc bought a Stafford car for £23,500.

The company’s depreciation policy for cars is 30% per annum using the reducing balance method.

On 1 April 2017, the Stafford car was part exchanged for a Derby car, which had a purchase price of £28,200.

Alex plc handed over a cheque to the seller for £19,350, in final settlement.

What was Alex plc’s profit or loss on the disposal of the Stafford?

Select ONE answer:

  1. £5,150 loss
  2. £7,835 profit
  3. £2,665 loss
  4. £6,250 loss

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 –> Cost £23,500 – Accumulated Depreciation £11,985 – PEV £8,850 = £2,625 Loss
  4. Not correct

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Accounting Multiple Choice Question – 28 March 2024

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

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On 1 June 2013 Alex plc purchased some plant at a price of £43,000.

It cost £1,500 to transport the plant to Alex plc’s premises and set it up, plus £900 for a licence to operate it.

The plant had a useful life of 8 years and a residual value of £3,500.

On 1 June 2015, the directors of Alex plc decided to change the depreciation method to reducing balance, at 40%.

What is the carrying amount of Alex plc’s machine in its statement of financial position at31 May 2016?

Select ONE answer:

  1. £20,025
  2. £20,280
  3. £20,550
  4. £20,955

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 – The initial amount capitalised is £44,500, as the licence cost is excluded from the value of the plant because it is not a directly attributable cost. Depreciation is initially ((44,500 – 3,500)/8) = £5,125 per annum, so at 1 June 2015 the carrying amount is (44,500 – (2 x 5,125)) = £34,250. Depreciation is then charged at 40% on this figure, giving a depreciation figure of £13,700 for the year to 31 May 2016, and a carrying amount of £20,550
  4. Not correct

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Accounting Multiple Choice Question – 27 March 2024

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

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The bookkeeper of Alex plc has been attempting to reconcile its list of non-current assets held to the non-current assets accounts in the nominal ledger.

The list of non-current assets shows a carrying amount of £300,070, but the net balance of the non-current assets cost and accumulated depreciation accounts in the nominal ledger shows a figure of £351,080.

On investigation the bookkeeper has discovered the only error made during the year was that the disposal of one asset has not yet been recorded in the nominal ledger.

Which TWO of the following scenarios would, individually, explain this difference?

  • 1  An asset was disposed of for £40,950 resulting in a profit on disposal of £10,060
  • 2  An asset was disposed of for £40,950 resulting in a loss on disposal of £10,060
  • 3  An asset was disposed of for £61,070 resulting in a profit on disposal of £10,060
  • 4  An asset was disposed of for £61,070 resulting in a loss on disposal of £10,060

Select ONE answer:

  1. 1 & 2
  2. 1 & 3
  3. 2 & 4
  4. 2 & 3

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 – 2 & 3 – The error in the cost and accumulated depreciation nominal ledger accounts means that an asset with a carrying amount of (£351,080 – £300,070) = £S1,010 must be credited to these accounts and debited to the disposal account. This is balanced in the disposal account by disposal proceeds of £40,950 and a loss on disposal of £10,060 both being credited (2), and also by disposal proceeds of £61,070 being credited and a profit on disposal of £10,060 being debited (3).

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