Category: Accounting

X and Y are sole traders.

On 1 October 2004 they agreed to form a partnership which would take over the assets of the separate businesses.

At 30 September 2004 the following information was available:

• Goodwill = X £15 000 & Y £12 000
• machinery = X £25 000 & Y £18 000
• stock and debtors = X £8 000 & Y £3 000
• cash at bank /(overdraft) = X £10 000 & Y overdraft of £(4 000)

What was the total of the tangible assets taken over by the partnership?

Select ONE answer:

1. £60 000
2. £64 000
3. £87 000
4. £91 000

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 2

1. Not correct
2. Correct ==> £15K + £12K + £25K + £18K + £8K + £3K + £10K (the overdraft is to be ignored)
3. Not correct
4. Not correct

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Why is a provision for depreciation made in accounts?

Select ONE answer:

1. to charge the cost of fixed assets against profits
2. to make a provision for repairs
3. to make cash available to replace fixed assets when necessary
4. to show the current market values of fixed assets

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.

Under which heading should negative Goodwill be included in a company’s Balance Sheet?

Select ONE answer:

1. capital reserves
2. intangible fixed assets
3. revenue reserves
4. share capital

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.

Which items are included in prime cost?

1. royalties on goods produced
2. closing stock of work in progress
3. depreciation of factory equipment
4. opening stock of raw materials

Select ONE answer:

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

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 business provides information:

• opening creditors – £20 000
• cash paid to creditors – £110 000
• purchases on credit – £120 000
• balances set-off against sales ledger – £2000
• discount received – £3000

What is the closing creditors balance?

Select ONE answer:

1. £25 000
2. £29 000
3. £30 000
4. £31 000

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 1

1. Correct = 20,000 +120,000 – 110,000 – 2,000 – 3,000
2. Not correct
3. Not correct
4. Not correct

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