Category: Accounting

What could cause an over-absorption of overhead expenditure?

1. Units produced exceeding the budgeted production
2. Units produced being less than the budgeted production
3. Overhead expenditure being less than budget
4. Overhead expenditure exceeding budget

Select ONE answer:

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

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

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Which method will increase company profits?

Select ONE answer:

1. accepting deposits for customers’ orders
2. decreasing rates of depreciation
3. increasing the value of opening stocks
4. writing down the value of closing stocks

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 ‘window dressing’ technique (if permitted) could be used to improve a company’s earnings per share figure?

Select ONE answer:

1. overstating the value of buildings by excessive revaluations
2. incorrectly classifying short term loans as long term loans
3. showing ‘cash equivalents’ as ‘cash’
4. failing to account for a material bad debt provision

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.

A company acquires the net assets of a business for which it issues £400,000 of ordinary shares.

The business acquired has an overdraft of £100,000 but no long term debt.

What is the impact on the gearing and the net cash position of the company?

Select ONE answer:

1. Gearing – Decreases / Net Cash – Increases
2. Gearing – Decreases / Net Cash – Decreases
3. Gearing – Increases / Net Cash – Increases
4. Gearing – Increases / Net Cash – Decreases

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 event reduces the interest cover?

Select ONE answer:

1. a decrease in dividend
2. a decrease in interest rates
3. an increase in dividend
4. an increase in interest rates

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.