Accounting Multiple Choice Question – 24 February 2020

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

At 31 May, according to John Smith’s creditors’ ledger, he owed Alpha Ltd, one of his suppliers, £1,518.

The balance shown on the statement he received from Alpha Ltd did not agree with this. A purchase by John Smith from Alpha Ltd of goods costing £520 was recorded on Alpha’s statement but not in John Smith’s ledger.

A cheque for £250 paid to Alpha Ltd was correctly recorded in John Smith’s ledger but was not shown on the statement from Alpha Ltd.

The balance on the statement from Alpha Ltd was?

Select ONE answer:

  1. £748
  2. £1,248
  3. £1,788
  4. £2,288

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
    Balance per John Smith’s ledger £1,518
    Invoice not yet recorded in the ledger £520
    The amount owed by John Smith to Alpha Ltd £2,038
    Cheque paid to Alpha Ltd. not yet recorded by Alpha Ltd -£250
    The balance shown on the statement from Alpha Ltd £1,788
  4. Not correct

 

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Accounting Multiple Choice Question – 23 February 2020

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

At 31 December the balance on a firm’s bank statement was £1,000 overdrawn. At the same date, outstanding cheques amounted to £3,000, outstanding lodgements amounted to £5,000 and there was a dishonoured cheque from a customer of £500 entered on the firm’s bank statement but not yet entered in the bank account in the firm’s ledger.

The balance brought down on the bank account in the firm’s ledger was?

Select ONE answer:

  1. £500 debit
  2. £500 credit
  3. £1,000 credit
  4. £1,500 debit

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
    Computation of Correct Ledger Balance as at 31 December
    Balance per bank statement -£1,000
    Outstanding lodgements £5,000
    Cheques not presented -£3,000
    Balance per ledger (corrected) £1,000

    However, as the dishonoured cheque has not yet been entered in the ledger, the actual ledger balance exceeds the correct ledger balance by £500. Therefore, the actual ledger balance is £500 debit.

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

 

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Accounting Multiple Choice Question – 22 February 2020

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

On 31 March the balance brought down on a firm’s bank account in its ledger was £3,600, credit.

At the same date, outstanding cheques amounted to £1,400 and outstanding lodgements amounted to £2,000. A cheque for £500, received from a debtor, was subsequently dishonoured. The receipt of the cheque had been correctly recorded but no entry has yet been made in the accounting records in respect of it being dishonoured.

On the basis of the above information, the balance on the firm’s bank statement at 31 March was:

Select ONE answer:

  1. £3,500 credit
  2. £3,700 credit
  3. £4,200 overdrawn
  4. £4,700 overdrawn

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

Correction of Ledger
Bank
Dr Balance c/d £4,100
Cr Balance b/d £3,600
Cr Dishonoured cheque £500
Totals £4,100

Bank Reconciliation Statement as at 31 March
Balance per ledger (corrected) -£4,100
Outstanding lodgements -£2,000
Cheques not presented +£1,400
Balance per bank statement £4,700

 

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Accounting Multiple Choice Question – 21 February 2020

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

If cheques totalling £12,000 sent by a firm to its creditors during an accounting period have not been presented at a bank by the end of that period, then, at that date, on the basis of the above information only . . .

Select ONE answer:

  1. the firm is owed £12,000 by its bank.
  2. the bank balance shown in the firm’s nominal (general) ledger is overstated by £12,000.
  3. the balance shown on the firm’s bank statement is £12,000 greater than the amount the firm has available to it from that bank account.
  4. the firm owes its creditors £12,000 more than the amount which will be shown for creditors in its balance sheet.

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 – Once the cheques are written, the money is no longer available to the firm. However, according to the bank statement, this money is still available as it is not yet recorded on the bank statement.
  4. Not correct

 

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Accounting Multiple Choice Question – 20 February 2020

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

Which of the following will not give rise to a difference between the balance shown on a firm’s bank statement and that shown, at the same date, in its nominal (general) ledger account for the bank?

Select ONE answer:

  1.  Errors made by the firm’s bank.
  2. Cheques are written by the firm which has not yet appeared on its bank statement.
  3. Lodgements made by the firm which have not yet appeared 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 4

  1. Not correct – Errors. made by the bank will give rise to a difference because the same errors will not have been made in the nominal (general) ledger.
  2. Not correct – Cheques written by the firm which have not yet appeared on its bank statement (outstanding cheques) will give rise to a difference because they have been recorded as having been issued in the nominal (general) ledger but they are not recorded in the bank statement.
  3. Not correct – Lodgements made by the firm which have not yet appeared on its bank statement (outstanding lodgements) will give rise to a difference because they have been recorded in the nominal (general) ledger but they are not recorded in the bank statement.
  4. Correct

 

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Accounting Multiple Choice Question – 19 February 2020

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

The total of cheques issued during the last six months which at the date on which a bank reconciliation statement is prepared, have not been shown on the bank statement . . .

Select ONE answer:

  1. should be included in the bank reconciliation statement.
  2. should be shown in the balance sheet under the heading ‘accruals‘.
  3. should be cancelled.
  4. are ‘stale’ cheques.

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 – These cheques (outstanding cheques) must be included in the bank reconciliation statement because they will have been recorded in the accounting records but have not been recorded in the bank statement. They therefore give rise to a difference between the two balances.
  2. Not correct – Accruals are amounts unpaid at the balance sheet date – not amounts that have been paid by cheque.
  3. Not correct – Cheques should be cancelled by the drawer (the person who wrote them) when he / she does not wish them to be cashed.
  4. Not correct – A ‘stale’ cheque is one which is dated more than six months ago and therefore cannot be cashed.

 

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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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