Category: Accounting

What is the normal treatment of life membership subscriptions?

Select ONE answer:

1. credit the income and expenditure account in the year of receipt
2. credit the life membership fund with the year’s receipts and transfer a proportion each year to the income and expenditure account
3. debit the income and expenditure account in the year of receipt
4. debit the life membership fund with the year’s receipts and transfer a proportion each year to the income and expenditure 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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A trial balance fails to agree.

The debits exceed the credits.

Which single error in the general (nominal) ledger would cause the difference in the trial balance?

Select ONE answer:

1. A contra between the debtors’ and creditors’ ledgers has been entered on the credit side of both control accounts.
2. A rental receipt has been entered twice in the rent receivable account.
3. The closing stock at the end of the previous period has not been entered in the stock account.
4. The opening electricity accrual has been brought forward on the wrong side of the ledger 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 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.

What is the calculation for capital employed?

Select ONE answer:

1. current assets – current liabilities
2. fixed assets + current assets – current liabilities
3. fixed assets + current assets + current liabilities
4. net assets – current liabilities

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.

EMS Ltd has a first profit for the year of £20,000 in its draft financial statements.

Capital receipts of £5,000 have been treated as revenue receipts.

Capital expenditure of £4,000 has been treated as revenue expenditure.

What is the correct profit for the year figure?

Select ONE answer:

1. £26,000
2. £59,000
3. £85,000
4. £144,000

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 = £18k + £36k + £5k
3. Not correct
4. Not correct

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

A company has issued non-cumulative preference shares and ordinary shares.

Which statement is correct?

Select ONE answer:

1. If no preference dividend is paid, it is carried forward to a future year.
2. Preference shareholders always get a dividend.
3. Preference shareholders and ordinary shareholders always get a dividend.
4. Preference shareholders may get a dividend.

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.