Accounting Multiple Choice Question – 25 March 2024

Alex plc’s income statement for the year ended 31 December 2024 showed a net profit of £83,600.

It was later found that £18,000 paid for the purchase of a van on 1 January 2024 had been debited to motor expenses account.

It is the company’s policy to depreciate vans at 25% per year.

What is the net profit after adjusting for this error?

Select ONE answer:

1. £106,100
2. £70,100
3. £97,100
4. £101,600

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 3

1. Not correct
2. Not correct
3. Correct – Draft net profit – £83,600 Add: purchase price – £18,000 Less: additional depreciation – (18,000 x 25%) (£4,500) = Adjusted profit = £97,100
4. Not correct

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