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The following items of expenditure take place during the first month of a transport business.

• rent – £1 000
• insurance of building – £1 300
• insurance of vehicle – £350
• road tax – £500
• purchase of vehicle – £15 000
• number plate for vehicle – £150
• painting of vehicle in company colours – £750
• wages for lorry driver – £100
• wages for painting vehicle – £150

What is the total capital expenditure?

Select ONE answer:

1. £15 000
2. £15 500
3. £16 050
4. £16 550

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 – £15,000 + £150 + £750 + £150
4. Not correct

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

A business employs machinists to make a single product.

As demand increases more machinists are employed. Every time eight extra machinists are employed, one extra supervisor is needed.

How are total labour costs best described?

Select ONE answer:

1. machinists – fixed & supervisors – variable
2. machinists – stepped & supervisors – variable
3. machinists – variable & supervisors – fixed
4. machinists – variable & supervisors – stepped

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.

A sales invoice to Lucy has not been recorded in the books of prime entry.

Which accounts are affected by this error?

Select ONE answer:

1. sales ledger control – no & Lucy – no
2. sales ledger control – no & Lucy – yes
3. sales ledger control – yes & Lucy – no
4. sales ledger control – yes & Lucy – yes

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.

Why is depreciation provided on non-current assets?

1. to ensure funds are available to replace the item
2. to ensure the profits of the business are not overstated
3. to match the cost of the asset with the revenue it earns

Select ONE answer:

1. 1, 2 and 3
2. 1 and 2 only
3. 1 and 3 only
4. 2 and 3 only

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.

A manufacturer has limited labour hours available to produce three types of products.

Which factor should be considered in order to maximise the profit?

Select ONE answer:

1. break-even of each product
2. profit per unit of each product
3. contribution per unit of each product
4. contribution per labour hour of each product

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.