Accounting Multiple Choice Question – 18 February 2020

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

The figure for ‘bank’ which should be shown in a firm’s balance sheet at any particular date is . . .

Select ONE answer:

  1. the balance at that date as shown by the firm‘s bank statement.
  2. the balance at that date per the firm’s bank nominal (general) ledger account.
  3. the reconciled bank balance on that date.
  4. None of the above.

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 – This balance may be incorrect (may not be the true amount of money available to the firm) because it does not take account of, for example, cheques written but not yet cashed.
  2. Not correct – This balance may be incorrect (may not be the true amount of money available to the firm) because it does not take account of bank charges, standing orders, dishonoured cheques, direct debits, credit transfers, and other items shown on the bank statement.
  3. Correct
  4. Not correct

 

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Accounting Multiple Choice Question – 17 February 2020

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

A cheque that was issued by a firm and sent to one of its creditors has not yet appeared on the firm’s bank statement. This cheque is known as . . .

Select ONE answer:

  1. a standing order.
  2. a dishonoured cheque.
  3. a credit transfer.
  4. an outstanding cheque.

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 – a standing order is an instruction to a bank to pay a specified amount out of one’s account at regular intervals.
  2. Not correct – a dishonoured cheque is a cheque returned by a bank to the person who presented it because there are insufficient funds in the drawer’s account to meet the cheque.
  3. Not correct – a credit transfer is a transfer of funds from a person or bank account into another bank account.
  4. Correct

 

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Accounting Multiple Choice Question – 16 February 2020

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

A bank reconciliation statement is . . .

Select ONE answer:

  1. part of the double-entry accounting records.
  2. not part of the double-entry accounting records.
  3. prepared by a firm and then sent to its bank.
  4. posted to the nominal (general) ledger.

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 – A bank reconciliation statement is a reconciliation between a figure in the nominal (general) ledger (double-entry records) and a figure on a bank statement. It is prepared at the end of an accounting period after all double-entry records for that period have been completed.
  3. Not correct
  4. Not correct

 

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Accounting Multiple Choice Question – 15 February 2020

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

The purpose of a firm preparing a bank reconciliation statement is . . .

Select ONE answer:

  1. to ascertain the amount of financing, if any. which it may require in the future.
  2. to ascertain whether bank charges have been correctly calculated by the bank.
  3. to ascertain whether the correct amount of interest has been paid to the firm by the bank on all money on deposit.
  4. to reconcile the bank balance in the firm’s accounting records at a particular date with that shown on its bank statement on the same date.

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 – A projection of the firm’s future cash inflows and outflows is required to ascertain the amount of financing, if any, which it may require in the future.
  2. Not correct – A calculation, not a reconciliation, is required to ascertain whether bank charges have been correctly calculated by the bank.
  3. Not correct – A calculation, not a reconciliation, is required to ascertain whether the correct amount of interest has been paid to the firm by the bank on all money on deposit.
  4. Correct

 

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Accounting Multiple Choice Question – 14 February 2020

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

A bank reconciliation statement is a statement which . . .

Select ONE answer:

  1. is sent by banks to their customers.
  2. is sent by banks to any of their customers who exceed their agreed credit limit with the bank.
  3. explains the difference between the bank balance shown in a firm’s accounting records and that shown on its bank statement.
  4. None of the above.

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 – A statement sent by banks to their customers is a ‘bank statement’ – i.e. a statement showing details of all transactions recorded by the bank on the customers’ accounts and the balances on those accounts.
  2. Not correct – Banks do send letters to customers who exceed their agreed credit limit with the bank but these letters are not known as bank reconciliation statements.
  3. Correct
  4. Not correct

 

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Accounting Multiple Choice Question – 13 February 2020

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

The accounting concept which prevents firms from frequently changing the stock valuation method they use, thereby preventing them from manipulating the figures in their profit and loss accounts and balance sheets, is……

Select ONE answer:

  1. The materiality concept.
  2. The consistency concept.
  3. The prudence concept.
  4. The going concern concept.

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 consistency concept means that similar items should be accounted for in a similar way from one accounting period to the next. Therefore, stock should be valued consistently over time. This would not be the case if the method used to value it or approximate its cost, changed from year to year.
  3. Not correct
  4. Not correct

 

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Accounting Multiple Choice Question – 12 February 2020

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

The valuation of stock at the lower of its cost and its net realisable value is an application of. . . 

Select ONE answer:

  1. the consistency concept.
  2. the going concern concept.
  3. the prudence concept.
  4. the accruals concept.

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 prudence concept means that profit should not be anticipated and all foreseeable losses. should be provided for as soon as they are foreseen. If stock was valued at an amount greater than its cost (NRV usually is greater than cost) it would include an element of profit, which, as the stock is not yet sold, would be an anticipation of profit. If stock was valued at its cost, when its net realisable value was lower, this would not be anticipating a foreseeable loss.
  4. Not correct

 

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