Category: Accounting

Which error would affect the balancing of a trial balance?

Select ONE answer:

1. A purchase invoice for £259 was entered in the purchases day book and the creditor’s account as £529.
2. A payment for rent of £250 has been debited in the bank account. It has been entered correctly in the rent account.
3. A sales invoice for £180 was lost, before it could be entered in the sales day book.
4. A sales return of £500 was debited in the debtor’s account and credited to the purchases returns account.

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

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The total of the balances in the purchases ledger does not agree with the balance on the purchases ledger control account.

It is found that a credit balance of £3,100 on a supplier’s account has been listed as a debit balance.

What is the effect of correcting the error on the total of the purchases ledger balances?

Select ONE answer:

1. £3,100 decrease
2. £3,100 increase
3. £6,200 decrease
4. £6,200 increase

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.

A company changes from the straight-line method of depreciation to the reducing balance method.

Which accounting principle has not been applied?

Select ONE answer:

1. consistency
2. going concern
3. historic cost
4. materiality

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 trial balance shows:

        Dr accounts receivable £28,000

                        Cr provision for doubtful debts £1,200

£2,100 of the outstanding invoices are irrecoverable and are to be written off.

The owner of the business wishes to make the provision for doubtful debts equal to 5 % of his outstanding customer invoices.

What is the amount debited to the income statement for the provision for doubtful debts?

Select ONE answer:

1. £95
2. £1,295
3. £1,400
4. £2,600

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 – £28,000 – £2,100 * 0.05 = £1,295 – £1,200 == > £95 increase
2. Not correct
3. Not correct
4. Not correct

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

A customer paid a deposit in advance for goods to be supplied at a later date.

How should this be recorded in the seller’s books?

Select ONE answer:

1. debit cash / credit customer
2. debit cash / credit sales
3. debit customer / credit prepayment
4. debit customer / credit sales

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.