Category: Accounting

A loan due for repayment in 30 months’ time has been included as a current liability.

What will be the effect when this is corrected?

Select ONE answer:

1. increase net assets
2. increase net current assets
3. no effect on net current assets
4. reduce net current assets

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 item should be treated as capital expenditure?

Select ONE answer:

1. cost of carriage on the purchase of a fixed asset
2. cost of replacement of part of a fixed asset
3. depreciation of a fixed asset
4. repairs to a fixed asset

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.

The accounting year end for a company is 31 October.

The company’s telephone bill received on 5 December for the three months ended 30 November was:

• telephone calls to 30 November – £1,041
• rental of equipment for the period from 1 September to 30 November – £156
• total telephone bill – £1,197

What accrual should the company make in the accounts for the year ended 31 October?

Select ONE answer:

1. £503
2. £798
3. £1,093
4. £1,197

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 ==> £1,197 / 3 then multiplied by 2 for September & October
3. Not correct
4. Not correct

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

A company has issued shares at a premium.

For what purpose from the options below can the balance on the share premium account be used by a business?

Select ONE answer:

1. to provide for the premium on the redemption of shares which were issued at par
2. to provide for the discount on a new issue of shares
3. to write off the preliminary expenses incurred in forming the company
4. to write off a loss on the revaluation of fixed assets

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 changed from using absorption costing to marginal costing.

This had no effect on profit for the month.

What had happened in the month?

Select ONE answer:

1. Production was stopped during the period.
2. Units produced and sold were equal.
3. Units produced were greater than units sold.
4. Units produced were less than units sold.

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.