The Multiple Choice Questions Blog

A company’s statement of financial position showed the total equity of £300,000 on 1 July 2020.

The following took place during the year ended 30 June 2021.

• Profit for the year was £77,500.
• An interim dividend of £9,000 was paid.
• A final dividend of £16,000 was proposed.

What was the total equity at 30 June 2021?

Select ONE answer:

1. £344,500
2. £352,500
3. £368,500
4. £376,500

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 – £300,000 + £77,500 – £9,000
4. Not correct

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Which items are capital reserves?

1 debentures
2 retained earnings
3 revaluation reserve
4 share premium

Select ONE answer:

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

Alex and Lucy have been in partnership sharing profits and losses in the ratio of 3 : 2.

The balances on the partners’ capital accounts at 31 December 2021 are shown.

Alex – £32,000
Lucy – £18,000

The partners decided to share profits and losses equally with effect from 1 January 2022.

There was no goodwill account in the books.

Goodwill is valued at £30,000 and is not to be retained in the books of account.

What is the balance on Alex’s capital account after the adjustment for goodwill on 1 January 2022?

Select ONE answer:

1. £15,000
2. £18,000
3. £35,000
4. £50,000

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 3

1. Not correct
2. Not correct
3. Correct ==> (£30k / 5 * 3 = £18k at 31 December 2021) – (£30k / 2 = £15K at 1 January 2022) —– > Increase of £3k to £35k
4. Not correct

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

Alex’s business has extracted the following information from its books of account at 31 December 2021, which is its first year of trading.

• carriage inwards – £12k
• carriage outwards – £15k
• closing inventory – £86k
• purchases – £286k
• returns inwards – £5k
• returns outwards – £2k
• revenue – £524k

What is the gross profit for the year ended 31 December 2021?

Select ONE answer:

1. £301,000
2. £309,000
3. £320,000
4. £328,000

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 2

1. Not correct
2. Correct ==> (£524k – £5k) – (£0 + £286k – £2k – £86k + £12k)
3. Not correct
4. Not correct

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