Day: October 17, 2026

Accounting Multiple Choice Question – 17 October 2026

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

Alex Manufacturing Ltd has a head office and several branches.

The head office operates a continuous inventory counting system.

The system ensures that all items are counted at least twice a year and checked against inventory records.

During the interim audit, an examination of the counts undertaken by head office staff showed that differences between inventory records and the physical count frequently arise.

Usually, actual inventory levels at branches are higher than book inventory.

Which one of the following explains this difference?

Select ONE answer:

  1. Unrecorded write offs of scrapped inventory
  2. Unrecorded branch requisitions
  3. Unrecorded purchase returns
  4. Unrecorded branch returns

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 – Actual inventory levels at branches are higher than book inventory – ie, there must be unrecorded goods inwards. Only unrecorded branch requisitions (goods coming in from head office) would explain this. Al the others would lean to book inventory higher than actual inventory.
  3. Not correct
  4. Not correct

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