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The following information is taken from the paperclip account of a business.

• stock of paperclips at beginning of the year – £600
• cash paid for paperclips during the year – £7,000
• invoice not yet received for paperclips – £480
• stock of paperclips at end of year – £800

How much should be debited to the Profit and Loss Account for paperclips?

Select ONE answer:

1. £6,680
2. £6,800
3. £7,280
4. £8,080

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 – £7,000 + £600 +£480 – £800
4. Not correct

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

A businessman starts trading with a bank balance of £124 000.

The budget for the first three months shows the following:

What is the budgeted opening bank balance at the start of month 3?

Select ONE answer:

1. £123 000
2. £158 000
3. £164 000
4. £189 000

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £124k + £30k + £40k – £12k – £13k + £20k

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

For what purpose might management undertake sensitivity analysis?

Select ONE answer:

1. to calculate employees’ bonuses
2. to determine levels of depreciation
3. to determine the effect of dividends on profit
4. to determine the selling price of a 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.

Which of the following may be used to smooth distributable profits from one year to another?

Select ONE answer:

1. asset revaluation reserve
2. capital redemption reserve
3. general reserve
4. provisions for depreciation

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 company has an authorised share capital of one million shares of £1.00 each and an issued capital of 800 000 shares of £1.00 each.

It pays a 10 % dividend.

The current dividend yield is 5%.

What is the market price of one share?

Select ONE answer:

1. £1.00
2. £1.60
3. £2.00
4. £2.50

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 ==> 5% = 10p / share price ==> 0.1 / 0.05 = £2
4. Not correct

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