Category: Accounting

Inventory should be valued at the lower of cost and net realisable value.

The table shows data about four products.

• Product W – Cost £18 & Realisable Value £15 & Selling Expenses £0
• Product X – Cost £19 & Realisable Value £28 & Selling Expenses £3
• Product Y – Cost £17 & Realisable Value £17 & Selling Expenses £2
• Product Z – Cost £23 & Realisable Value £26 & Selling Expenses £3

At how much should the total stocks be valued?

Select ONE answer:

1. £72
2. £77
3. £78
4. £86

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 – £15 + £19 + £15 + £23
2. Not correct
3. Not correct
4. Not correct

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How should goodwill be treated in the accounts of a limited company?

Select ONE answer:

1. Goodwill should always be written off immediately.
2. Non-purchased goodwill is shown in the balance sheet.
3. Purchased goodwill remains on the balance sheet as a permanent item.
4. Purchased goodwill is shown in the balance sheet and written off over its useful life.

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 draft Balance Sheet shows a bank balance of £1,400.

The following information is now available.

• cheques issued but not yet cleared by the bank – £150
• bank charges not in the cash book – £45
• lodgements in the cash book but not on the bank statement – £220

What is the figure shown on the Bank Statement?

Select ONE answer:

1. £1,285
2. £1,355
3. £1,425
4. £1,515

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 – £1,400 + £150 – £220 – £45
2. Not correct
3. Not correct
4. Not correct

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

Lucy Ltd has calculated a draft net profit of £56,750.

They then discover the following mistakes:

Discounts Received of £580 and Discounts Allowed of £665 have been recorded on the wrong sides of the respective Discounts Received and Allowed accounts.

What is the corrected draft net profit for Lucy Ltd?

Select ONE answer:

1. £56,580
2. £56,665
3. £56,835
4. £56 920

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 – £56,750 + (£580 * 2) – (£665 * 2)
2. Not correct
3. Not correct
4. Not correct

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

The following information is extracted from the records of a business.

• At 31 December 2014 – Rent paid in advance £4,000
• During the year ended 31 December 2015 – Rent paid £41,000
• At 31 December 2015 – Rent paid in advance £7,000

How much will be debited for rent in the Profit and Loss Account for the year ended 31 December 2015?

Select ONE answer:

1. £34,000
2. £38,000
3. £41,000
4. £44,000

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– – £4k + £41k – £7k
3. Not correct
4. Not correct

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