The Multiple Choice Questions Blog

The diagram shows a break-even chart. 

What does line XY represent?

Select ONE answer:

1. the break-even point revenue 
2. the margin of safety in terms of revenue
3. the profit at break-even point
4. the total contribution at break-even point  

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
3. Not correct
4. Not correct

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

Which item is a fixed cost? 

Select ONE answer:

1. factory rent
2. maintenance of machinery
3. postage and stationery
4. sales commission

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 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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

The following relates to a business. 

• debtor’s collection period  —  26 days
• creditor’s payment period  —  34 days
• rate of stock turnover  —  33 days

What is the business’s working capital cycle? 

Select ONE answer:

1. 25 days
2. 27 days
3. 59 days
4. 93 days

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 1

1. Correct ==> 26 +33 – 34
2. Not correct
3. Not correct
4. Not correct

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

What would increase the working capital (current) ratio of a business?

Select ONE answer:

1. buying stock on credit for £2,000 and selling immediately for £3,000 cash
2. paying creditors £1,000 cash
3. purchasing a fixed asset of £10,000 on credit
4. selling stock of £1,000 at cost price on credit

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 1

1. Correct
2. Not correct
3. Not correct
4. Not correct

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

A company wants to increase its return on capital employed in the short term.

Which course of action will achieve this?

Select ONE answer:

1. invest in new plant and machinery
2. reduce the level of dividends paid to investors
3. reduce the level of overhead expenses
4. revalue freehold land and buildings upwards

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.