Accounting Multiple Choice Question – 26 May 2020

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

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Financial Reporting Standards were formally issued by the . . . ?

Select ONE answer:

  1. the Stock Exchange.
  2. the government.
  3. the Accounting Standards Board.
  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 – The Stock Exchange issues rules and regulations concerning the financial statements of PLCs whose shares are listed on the exchange.
  2. Not correct – The government is responsible for preparing legislation.
  3. Correct
  4. Not correct

 

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Accounting Multiple Choice Question – 25 May 2020

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

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Goodwill maIn the financial statements of a company, goodwill should be shown . . .?

Select ONE answer:

  1. under the heading ‘current assets’.
  2. under the heading ‘intangible fixed assets’.
  3. under the heading ‘tangible fixed assets’.
  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
  2. Not correct
  3. Correct – As goodwill will normally have an expected useful economic life of more than one year, it is a fixed asset. As it does not have physical substance, it is an intangible asset.
  4. Not correct

 

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Accounting Multiple Choice Question – 24 May 2020

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

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Goodwill may arise in a company’s financial statements if. . .?

Select ONE answer:

  1. the company acquires another company for more than the fair value of its separable net assets.
  2. the company sells a fixed asset at a profit.
  3. the market value of its shares exceeds their nominal (par) value.
  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 1

  1. Correct
  2. Not correct – If a company sells a fixed asset at a profit. the asset and the depreciation on it (if any) are removed from the balance sheet. the money received is added to the bank balance and the profit is shown in the profit and loss account. An asset disposal account is used to record the above.
  3. Not correct – The market value of most companies’ shares exceeds their nominal (par) value. However, as the market value is not shown in the financial statements this is of no significance from this point of view.
  4. Not correct

 

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Accounting Multiple Choice Question – 23 May 2020

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

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In the accounts of a company, goodwill (when it exists) . . . ?

Select ONE answer:

  1. must be a debit balance.
  2. must be a credit balance.
  3. can be either a debit or a credit balance.
  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
  2. Not correct
  3. Correct – Goodwill is the difference between the sum of the fair values of individual assets and liabilities and their purchase price. This difference can be either positive (in which case goodwill will be a debit balance) or negative (in which case goodwill will be a credit balance), depending on the purchase price.
  4. Not correct

 

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Accounting Multiple Choice Question – 22 May 2020

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

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A company issued ordinary shares at their nominal (par) value and received payment in full.

The effect of this on the company’s financial statements is . . .?

Select ONE answer:

  1. the bank balance is increased and the figure shown in the balance sheet for ordinary share capital is increased.
  2. the bank balance is decreased and the figure shown in the balance sheet for ordinary share capital is decreased.
  3. the bank balance is increased and the figure shown in the balance sheet for ordinary share capital is decreased.
  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 1

  1. Correct – Money has been received – so the bank balance is increased. Shares have been issued – so the company’s share capital has been increased.
  2. Not correct
  3. Not correct
  4. Not correct

 

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