The Multiple Choice Questions Blog

When a company is short of liquid funds, for what purpose may the reserves be used? 

Select ONE answer:

1. to finance the take-over of another business the company is anxious to acquire
2. to maintain dividends during periods of low profitability
3. to pay creditors promptly so as to obtain discounts
4. to write down assets whose value to the business has fallen

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 business ends its financial year on 31 December. The stock was not counted until 10 January when it was found to be £104,000 at cost. The following transactions took place from 1 to 10 January. 

• stock purchased  —  £16,000
• stock sold at selling price  —  £15,000

Stock is sold at a mark-up of 25 %. 

What was the value of stock at 31 December? 

Select ONE answer:

1. £99,250
2. £100,000
3. £108,000
4. £108,750

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 ==> £104,000 – £16,000 + (£15,000 / 1.25)
3. Not correct
4. Not correct

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

What is the definition of prime cost?

Select ONE answer:

1. direct materials + direct labour
2. direct materials + direct labour + direct expenses
3. direct materials + direct labour + factory overheads
4. direct materials + direct labour + direct expenses + factory overheads

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.

The directors of a company are completing the accounts for the year ended 30 April 2020.

They discover that the stock at 1 May 2019 was over-valued by £50,000.

What is the effect of correcting this error in the accounts?

Select ONE answer:

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.

Which item will be included in a Balance Sheet as a creditor?

Select ONE answer:

1. loan stock issued by a company
2. preference shares issued by a company
3. revaluation reserve
4. share Premium account

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.