Category: Accounting

The following information is extracted from the books of a company.

• Freehold premises at cost – £150,000
• Provision for depreciation of freehold premises – £100,000
• The premises are revalued at – £300,000.

Which entries are required in the company’s books to record the revaluation?

Select ONE answer:

1. Profit and Loss Account debit £0 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £250,000
2. Profit and Loss Account debit £100,000 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £250,000
3. Profit and Loss Account debit £100,000 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £300,000
4. Profit and Loss Account debit £0 / Freehold Premises at Cost account debit £150,000 / Provision for depreciation debit £100,000 / Revaluation Reserve credit £300,000

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
2. Not correct
3. Not correct
4. Not correct

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

What is an example of the application of the generally accepted accounting practice of applying the practice of accounting entries that show the substance over form for a true and fair view (De facto vs De Jure)?

Select ONE answer:

1. accounting for stock losses
2. recording an asset acquired under a hire purchase agreement as a fixed asset
3. recording the premium on the issue of ordinary shares in a share premium account
4. writing off a debt from a customer in liquidation

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.

Businesses anticipate losses but not profits in preparing their annual accounts.

Which accounting concept is being applied here?

Select ONE answer:

1. accruals
2. consistency
3. going concern
4. prudence

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.

At the end of year 1, a company had a debit balance of £770 on its Rent Payable account.

Payments for rent in year 2 totalled £10,700 and at the end of the year rent prepaid was £1,280.

How much rent was charged against profit in year 2?

Select ONE answer:

1. £8,650
2. £10,190
3. £10,700
4. £11,210

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==> +£770 + £10,700 – £1,280
3. Not correct
4. Not correct

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

A business makes a provision for doubtful debts equal to 5% of its debtors.

At 31 March 2020 net debtors were shown in the Balance Sheet as £17 100.

At 31 March 2021 the balance on its Sales Ledger Control account was £19 000. In the year ended 31 March 2021 a bad debt of £800 had been written off.

How much should be debited in the Profit and Loss Account for the year ended 31 March 2021 for the provision for doubtful debts?

Select ONE answer:

1. £10
2. £50
3. £55
4. £95

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.