Category: Accounting

A business values obsolete stock at net realisable value. 

Which accounting principle has been applied?

Select ONE answer:

1. consistency
2. going concern
3. materiality
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

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Freehold land and buildings are shown in the accounts at a cost price of £200,000 and accumulated depreciation of £40,000.

The property is to be revalued in the books at £340,000. What is the double entry to record this transaction? 

Select ONE answer:

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

• Not correct
• Not correct
• Not correct
• Correct

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

The table shows information relating to the fixed assets of a business. 

What is the figure for fixed asset additions?

Select ONE answer:

1. £2,000
2. £6,000
3. £10,000
4. £16,000

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 3

1. Not correct
2. Not correct
3. Correct ==> £25,000 + £9,000 + £4,000 = £38,000 – £28,000 = £10,000
4. Not correct

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

On 1 October 2018, a company purchased machinery for £26,000 whose year-end is 31 December.

It was decided to depreciate the asset using the reducing balance method at a rate of 20% per annum in the year of acquisition and none in the year of disposal.

On 30 September 2020 the asset was sold for £12,000. 

What is the profit or loss on disposal?

Select ONE answer:

1. £3,600 loss
2. £3,600 profit
3. £4,640 loss
4. £4,640 profit

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 = £26,000 * 0.8 * 0.8 = £16,640 – £12,000 = £4,640 Loss
4. Not correct

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

At the beginning of the year a business has a provision for doubtful debts of £2,600.

At the year end the provision is to be 5% of trade debtors. 

The balance on the Debtors Control account at the year end is £69,200, before writing off a bad debt of £480. 

The business operates a separate Bad Debts account.

What is the entry in the Profit and Loss Account for the provision for doubtful debts? 

Select ONE answer:

1. £836 debit
2. £860 debit
3. £836 credit
4. £860 credit

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 – (£69,200 – £480) * 0.05 = £3,436 – £2,600 ==> £836 debit
2. Not correct
3. Not correct
4. Not correct

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