Category: Accounting

Alex sent goods to Lucy on a sale or return basis at a selling price of £5,000.

His selling price is based on a mark-up of 25%.

Lucy returned goods with a selling price of £1,000 and purchased the remainder.

What was the net effect on Alex’s inventory value?

Select ONE answer:

1. £800 increase
2. £1,000 increase
3. £3,200 decrease
4. £4,000 decrease

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 – (£5k – £1k) = £4k * 0.8 (25% MUP = 20% GM) ==> £3.2K
4. Not correct

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The following information is available for a business.

The balance on its purchases ledger control account was £5,900.

The total of the balances in its purchases ledger was £5,510.

The following errors were discovered.

1. The purchases journal had been overcast by £250.
2. A sales ledger contra of £340 had been omitted from the purchases ledger control account.
3. A supplier was paid £400 which was correctly entered in the cash book but had been entered in the supplier’s account as £200.

What is the correct value of trade payables?

Select ONE answer:

1. £5,110
2. £5,250
3. £5,310
4. £5,510

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’s suspense account appears as follows:

discount allowed 150 opening balance 100
sales 50
£150 £150

Which statements are correct?

1 Total debits had been £100 less than total credits in the trial balance.
2 The sales account had been overcast by £50.
3 The discount allowed account had been overcast by £150.

Select ONE answer:

1. 1 and 2
2. 1 only
3. 2 and 3
4. 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 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 bank statement shows a credit balance of £1,500.

A payment of £500 and a receipt of £1,250 were included in the cash book but have not yet appeared on the bank statement.

Bank interest payable of £1,100 had been correctly recorded in the cash book but due to a bank error had been recorded in the bank statement as £1,000.

What is the cash book balance?

Select ONE answer:

1. £650
2. £850
3. £2,150
4. £3,350

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 ==> £1,500 – £500 + £1,250
4. Not correct

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

A business with a year-end of 31 December purchased a motor vehicle on 1 January 2018 for £24,000.

The estimated useful life of the motor vehicle was four years and the estimated residual value at the end of four years was £8,000.

The business depreciates motor vehicles at 25% per annum using the reducing balance method.

No depreciation is charged in the year of disposal.

The motor vehicle was sold on 31 July 2021 for £12,000.

What was the profit on the sale of the motor vehicle?

Select ONE answer:

1. £1,875
2. £4,000
3. £5,250
4. £6,000

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 ==> £24,000 * 0.75 * 0.75 * 0.75 ==> £10,125 – £12,000 ==> £1,875 profit
2. Not correct
3. Not correct
4. Not correct

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