Accounting Multiple Choice Question – 7 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A sole trader received an order from a credit customer on the last day of the financial year 31 May 2016. No entries were made in the accounting records for the sale of goods until the invoice was raised on 3 June 2016 when the goods were shipped.

Which accounting concept is being applied?

Select ONE answer:

  1. Consistency
  2. Going concern
  3. Prudence
  4. Realisation
  5. Separate Entity

Define and explain the accounting convention of ‘Materiality’?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 4 – With this convention, the accounts recognise any transactions (and any profits arising from them) at the point of sale or transfer of legal ownership – rather than just when cash actually changes hands. For example, a company that makes a sale to a customer can recognise that sale when the transaction is legal – at the point of contract. The actual payment due from the customer may not arise until several months later, if the customer has been granted some credit terms. In this case an order has been received on the last day of the financial year 31 May 2016, but the actual good were shipped on 3 June 2016, and it is at this point that the sale is related and the appropriate entries for this credit customer raised of Dr Debtors Cr Sales.

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Accounting Multiple Choice Question – 6 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The following information was provided by a sole trader for the year ended 31 December 2015.

Table 09

 

What was the business’s profit or loss for 2015?

Select ONE answer:

  1. Loss £8,000
  2. Loss £14,000
  3. Loss £11,000
  4. Profit £8,000
  5. Profit £14,000

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 – The calculation is as follows: Capital at 31 December 2015 is £29,000 + Drawings of £11,000 making a total of £40,000. Subtract the Capital 1 January 2015 of £32,000 implies that a profit of £8,000 was made by the business in 2015.

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Accounting Multiple Choice Question – 5 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A sole trader has not maintained proper books of account. The following information is available relating to trade receivables for the year ended 30 June 2016.

 

Table 08

What is the value of credit sales for the year ended 30 June 2016?

Select ONE answer:

 

  1. £196,000
  2. £200,000
  3. £210,000
  4. £212,000
  5. £214,000

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 3 – The calculation is as follows: Receipts from trade receivables £205,000 + Sales Returns £7,000 + Trade Receivables at 30 June 2016 of £12,000 – Trade Receivables at 1 July 2015 of £14,000

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Accounting Multiple Choice Question – 4 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

A bookkeeper recorded a payment for vehicle repairs in the vehicles account. Which of the following correctly describes the type of error and corrections to be made?

Select ONE MOST LIKELY answer:

Table 07.png

 

What is the definition of an accounting error of principle?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 5 – An accounting error is a non-fraudulent discrepancy in financial documentation. The error of commission is a transaction that is calculated incorrectly. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly. This is an error of principle, so the value needs to be moved from vehicles to which it was originally debited (the original credit was to cash or bank) to vehicle repairs.

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Accounting Multiple Choice Question – 3 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The owner of a restaurant purchased some equipment on credit for business use but returned the equipment to the supplier as it was damaged.  How should the return of the equipment be recorded in the books of the restaurant?

Select ONE MOST LIKELY answer:

Table 06

Why is this recorded as a general journal and not as a purchase returns journal?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

 

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

The answer is 2 – Whilst the equipment was purchased on credit, the original invoice would have been recorded as Dr Equipment (Fixed Assets) Cr Supplier (Balance Sheet) through a general ledger journal. Returning the equipment when it was damaged simply means reversing this journal.

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Economics Multiple Choice Question – 2 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which ONE of the following statements is correct?

Select ONE answer:

  1. The Keynesian long-run AS curve implies that an economy may have a negative output gap in the long run
  2. The Keynesian long-run AS curve is perfectly inelastic at all levels of real national output
  3. The classic long-run AS curve implies that an economy may have spare capacity in the long run
  4. The classical long-run AS curve is perfectly elastic at all levels of real national output
  5. The classical long-run AS curve implies that an economy may have a negative output gap in the long run

Define the term productivity:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 1 – Keynesians believe the long run aggregate supply can be upwardly sloping and elastic. They argue that the economy can be below the full employment level, even in the long run. For example, in recession, there is excess saving, leading to a decline in aggregate demand. Keynesians also believe wages and prices can be sticky, and therefore, economies don’t automatically return to full employment equilibrium.

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Economics Multiple Choice Question – 1 October 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

The charts below show forecast UK government revenue and government spending for the financial year 2013/2014.

Diagram 02

Which ONE of the following can be inferred from the charts above? The UK government forecast that for the financial year 2013/2014……….

Select ONE answer:

  1. It would earn five times as much revenue from income tax as from corporation tax
  2. It would spend more on health, than on education and defence added together
  3. More than one-quarter of its revenue would come from VAT
  4. Spending on social protection would comprise more than 30% of its total spending
  5. Other sources of income contribute more than VAT and NI added together.

Using the data in the two charts, calculate the size of the UK government’s forecast budget deficit for the financial year 2013/2014. You are advised to show your workings:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 4 – Total forecast spending in 2013 / 2014 is £720 bn. Social protection spending equals £220 bn / £720 bn or 30.5%

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