Author: stuart001uk2014

The table shows the fixed budget for a business as follows.

sales and production units  —  20,000

sales value  —  £400,000
variable costs  —  £280,000
fixed costs  —  £50,000

Actual production and sales were 14,000 units.

Using a fixed budget, what would profit be?

Select ONE answer:

1. £28,000
2. £34,000
3. £49,000
4. £84,000

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 ==>  £400,000 / 20,000 – £280,000 / 20,000 = CM £6 * 14,000 units – £50,000 ==> £34,000
3. Not correct
4. Not correct

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

The table shows a company’s estimated sales. 

• February – Cash Sales £10,000  /  Credit Sales – £15,000
• March – Cash Sales £10,000  /  Credit Sales – £25,000
• April – Cash Sales £10,000  /  Credit Sales – £35,000

Debtors are expected to pay as follows: 

• 60 % in month following sale
• 40 % in second month following sale

How much cash from sales is received in April?

Select ONE answer:

1. £21,000
2. £25,000
3. £31,000
4. £45,000

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 3

1. Not correct
2. Not correct
3. Correct ==> £10,000 + Feb Sales 15,000 * 0.4 + March Sales 25,000 * 0.6
4. Not correct

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

What is a master budget?

Select ONE answer:

1. a budget based on a limited factor
2. a cash budget
3. a flexible budget
4. a set of budgeted final accounts

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

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

The capital structure of a company is given:

• 300 000 ordinary shares of £0.50  —  150,000 
• Reserves  —  £85,000
• 10% debentures 2024 – 2025  —  £60,000

The company then issues £20,000 8% debenture stock 2028 – 2030, followed by the issue of bonus shares on a one for three basis.

Finally it makes a rights issue of 1 ordinary share for every two already held at £0.80 per share.

How will these transactions affect the Balance Sheet? 

Select ONE answer:

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
3. Not correct
4. Not correct

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

How may a company ‘window dress’ its financial statements?

What will achieve this?

Select ONE answer:

1. amortising Goodwill as soon as it arises
2. failure to write down freehold property following a revaluation shortly after the Balance Sheet date
3. omitting to write down stock which has been stolen after the Balance Sheet date
4. writing off debts before they have become bad

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
3. Not correct
4. Not correct

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