Category: Accounting

The accounting year end for a company is 31 October.

The company’s telephone bill received on 5 December for the three months ended 30 November was:

• telephone calls to 30 November – £1,041
• rental of equipment for the period from 1 September to 30 November – £156
• total telephone bill – £1,197

What accrual should the company make in the accounts for the year ended 31 October?

Select ONE answer:

1. £503
2. £798
3. £1,093
4. £1,197

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 ==> £1,197 / 3 then multiplied by 2 for September & October
3. Not correct
4. Not correct

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A company has issued shares at a premium.

For what purpose from the options below can the balance on the share premium account be used by a business?

Select ONE answer:

1. to provide for the premium on the redemption of shares which were issued at par
2. to provide for the discount on a new issue of shares
3. to write off the preliminary expenses incurred in forming the company
4. to write off a loss on the revaluation 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 3

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

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

A business changed from using absorption costing to marginal costing.

This had no effect on profit for the month.

What had happened in the month?

Select ONE answer:

1. Production was stopped during the period.
2. Units produced and sold were equal.
3. Units produced were greater than units sold.
4. Units produced were less than units sold.

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.

Why might a business prepare budgets?

1 to improve coordination between departments
2 to encourage planning and decision-making
3 to monitor and control costs

Select ONE answer:

1. 1, 2 and 3
2. 1 and 2 only
3. 1 and 3 only
4. 2 and 3 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 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 company’s budget shows figures for costs and sales for the month ended 31 March 2022.

• selling price per unit – £35
• variable costs per unit – £20
• fixed costs – £10,000
• volume sold – 2,000 units

In March the actual sales volume was 10% lower than budgeted.

By how much was actual profit lower than budgeted profit?

Select ONE answer:

1. £2,000
2. £3,000
3. £5,700
4. £7,000

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 – CM = £35 – £20 = £15 * 2,000 units – £10,000 FC = £20,000 Profit ==> £15 * 1,800 units – £10,000 FC = £17,000 profit —-> £3,000 lower actual profit
3. Not correct
4. Not correct

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