Category: Accounting

The following is a list of the assets and liabilities of a firm at a particular date:

• Premises owned by the firm – £20,000
• Money owned by the firm to its creditors – £3,000
• Stock owned by the firm – £8,500
• Loan received by the firm from a bank – £4,000
• Cash in the firm’s safe – £100

Which of the following amounts is the firm’s capital at that date is the correct one?

Select ONE answer:

1. £21,100
2. £21,600
3. £32,400
4. None of the above

Show your workings to arrive at your answer, and explain and justify your reasons:

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

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 2:
Assets
– Premises owned by the firm £20,000
– Stock owned by the firm £8,500
– Cash in the firm’s safe £100
– Total Assets – £28,600

Liabilities
– Money owned by the firm to its creditors £3,000
– Loan received by the firm from a bank £4,000
– Total Liabilities – £7,000

Net Assets or Capital = Assets – Liabilities or £28,600 – £7,000 = £21,600

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Which of the following accounting equations is the correct one?

Select ONE answer:

1. Asset + Capital = Liabilities
2. Liabilities – Capital = Assets
3. Capital = Assets + Liabilities
4. Capital = Assets – Liabilities

Show your workings to arrive at your answer, and explain and justify your reasons:

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

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 1 – This is as per the accounting equation.

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

Which of the following accounting equations is the correct one?

Select ONE answer:

1. Asset + Capital = Liabilities
2. Liabilities – Capital = Assets
3. Capital = Assets + Liabilities
4. Capital = Assets – Liabilities

Show your workings to arrive at your answer, and explain and justify your reasons:

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

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 4 – This is as per the accounting equation.

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

Which of the following is a liability of a firm?

Select ONE answer:

1. A building owned by a firm.
2. Cash in the firm’s safe.
3. Money owed to the firm by its debtors.
4. Money which the firm has borrowed and has not yet repaid.

State one other type of liability that a business might have:

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

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 4 – liabilities are obligations to pay amounts of money. 1 – a building owned by a firm is an asset / resource. 2 – cash in the safe is an asset / resource. 3 – money owed by debtors is an asset / resource.

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Which of the following is an asset of a firm?

Select ONE answer:

1. Machinery owned by the firm.
2. Money owed by the firm to one of its suppliers in respect of goods purchased on credit.
3. An overdrawn balance on the firm’s bank account.
4. The capital of the firm.

State one other type of asset that a business might have:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 1.because machinery is a resource from which benefits can be derived through use. 2 – Money owed by the firm to one of its suppliers is a liability. 3 – An overdrawn bank account is a liability. 4 – The capital of a firm is money owed by the business to the owners of the business.

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