Category: Accounting

What is the net present value of an investment equal to when the internal rate of return is calculated?

Select ONE answer:

1. the aggregate anticipated future cash income at compound interest
2. the initial expenditure on the investment
3. the resale value of the asset on completion of the project
4. zero

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.

What does this formula show?

•   Average annual profit / Average investment

Select ONE answer:

1. accounting rate of return
2. internal rate of return
3. net present value
4. payback period

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 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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

A company has a standard labour cost for one unit of 8 hours of direct labour at £6 per hour.

In a given period 540 units were produced in 4,300 hours at a total direct labour cost of £26,660.

What is the labour efficiency variance for the period?

Select ONE answer:

1. £120 adverse
2. £120 favourable
3. £860 adverse
4. £860 favourable

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 – 540 units * 8 hours = 4,320 hours – 4,300 actual hours so 20 hours * £6 = £120 favourable
3. Not correct
4. Not correct

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

A company has a favourable direct material price variance, an adverse direct material usage variance and an adverse direct labour efficiency variance.

There is a direct relationship between all of the variances.

What is the most likely reason for this relationship?

Select ONE answer:

1. Direct labour is of a higher quality than standard.
2. Direct labour is of a lower quality than standard.
3. The material is of a higher quality than standard.
4. The material is of a lower quality than standard.

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.

Alex Ltd’s sales revenue is split as follows:

25% cash sales
75% credit sales payable in one month

Total projected sales for Alex Ltd for the following months are shown in the table below:

• January – £30,000
• February – £32,000
• March – £40,000

What will be the cash receipts in March?

Select ONE answer:

1. £10,000
2. £24,000
3. £34,000
4. £40,000

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 – £40k * 0.25 + £32k * 0.75
4. Not correct

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