Category: Accounting

In the case of a DIY store, which of the following double-entries is the correct way to record the payment of council business rates for the for the current accounting period by cheque ………..?

Select ONE answer:

1. Account to Debit Bank / Account to Credit Rates
2. Account to Debit Rates / Account to Credit Bank
3. Account to Debit Expenses / Account to Credit Bank
4. None of the above

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 – All expenses are recorded as debit entries in the relevant expense account and the bank balance is thus reduced as a result through a credit.

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

In the case of a garage which deals with the public, which of the following double-entries is the correct way to record the lodgement of hire purchase commission received as a result of selling cars to customers ………..?

Select ONE answer:

1. Account to Debit Bank / Account to Credit Sales
2. Account to Debit Sales / Account to Credit Bank
3. Account to Debit Bank / Account to Credit Commission
4. None of the above

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 – Only the sale of “goods” should be recorded in the sales account as a credit. There should be a separate account for hire purchase commission.

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

In the case of a sole trader ………..?

Select ONE answer:

1. Earning profit does not affect capital.
2. Earning profit reduces capital.
3. Capital can arise only by earning profits.
4. Earning profit increases capital.

Explain how losses affect capital for a sole trader?:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 4 – Earning profit increases capital.

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

Which of the following double-entries is the correct way to record that goods returned to XYZ Ltd, who is one of your suppliers?

Select ONE answer:

1. Account to Debit Sales / Account to Credit XYZ Ltd
2. Account to Debit Returns Inwards / Account to Credit XYZ Ltd
3. Account to Debit Cash / Account to Credit Purchases
4. Account to Debit XYZ Ltd / Account to Credit Returns Outwards

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 – As XYZ Ltd is a creditor, then their account is a liability to the business. As a result of returning goods to XYZ Ltd, they are now owed less money. This reduction in a liability has to be recorded by a debit entry. Entries in the returns outwards account are always on the credit side.

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

In the accounts of ABC Ltd, which of the following double-entries is the correct way to record that goods have been purchased from XYZ Ltd and paid for immediately in cash?

Select ONE answer:

1. Account to Debit Sales / Account to Credit ABC Ltd
2. Account to Debit Returns Inwards / Account to Credit XYZ Ltd
3. Account to Debit Purchases / Account to Credit Cash
4. Account to Debit XYZ Ltd / Account to Credit Returns Inwards

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 – Entries in the purchase account are always made on the debit side. Having paid cash to XYZ Ltd, ABC Ltd has now less cash on hand. This reduction in this asset has to be recorded as a credit entry in the cash account.

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