Category: Accounting

What would be treated as part of the capital cost of the purchase of a building?

1 legal costs of the purchase
2 redecoration of the building
3 installation of air conditioning needed for the machinery in the building

Select ONE answer:

1. 1 only
2. 1 and 3 only
3. 2 and 3 only
4. 1, 2 and 3

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.

A company can only invest £1 million in the current period.

• project 1 – capital requirement (current period) £1.2m with an NPV of £5m
• project 2 – capital requirement (current period) £1.0m with an NPV of £2.5m
• project 3 – capital requirement (current period) £0.6m with an NPV of £1.5m
• project 4 – capital requirement (current period) £0.4m with an NPV of £1.2m
• project 5 – capital requirement (current period) £0.4m with an NPV of £1.0m

Which project(s) should the company undertake to maximise its shareholders’ wealth?

Select ONE answer:

1. 1
2. 2
3. 3 and 5
4. 3 and 4

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.

Which Investment Appraisal technique includes depreciation in the calculation?

Select ONE answer:

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

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.

The shaded area in the diagram represents the standard material cost for a 2000 unit manufacturing run of Product X.

The larger box represents the total material cost.

Which statement is true?

Select ONE answer:

1. material price variance – Adverse & material usage variance – Adverse
2. material price variance – Adverse & material usage variance – Favourable
3. material price variance – Favourable & material usage variance – Adverse
4. material price variance – Favourable & material usage variance – 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 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.

Which statement best describes the objectives of standard costing?

Select ONE answer:

1. It assists in budget preparation.
2. It improves control on a ‘management by exception’ basis.
3. It provides a prediction of future costs.
4. All 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
2. Not correct
3. Not correct
4. Correct

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