Accounting Multiple Choice Question – 28 July 2023

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

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When is it necessary to distinguish between revenue and capital expenditure?

Select ONE answer:

  1. when preparing cash budgets
  2. when preparing investment appraisal calculations
  3. when preparing profit and loss accounts
  4. when preparing purchase ledger control accounts

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

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Accounting Multiple Choice Question – 27 July 2023

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

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Discounting methods have been used to evaluate an investment project over a three year life.

The project will produce annual net inflows of £2M.

£500,000 of the initial investment can be recovered at the end of the third year.

Discount factors at 10 % are:

  • Year 1 – factor 0.91
  • Year 2 – factor 0.83
  • Year 3 – factor 0.75

What is the present value of project cash inflows?

Select ONE answer:

  1. £4.98M
  2. £5.36M
  3. £5.48M
  4. £6.38M

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 – Y1 £2M * 0.91 = £1.82M + Y2 £2M * 0.83 = £1.66M + Y3 £2M * 0.75 = £1.5M + IV £0.5M * 0.75 = £0.375M == > £5.36M
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 26 July 2023

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

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The following four methods are used to evaluate projects.

  • accounting rate of return
  • internal rate of return
  • net present value
  • payback

Which methods are based on using cash flows?

Select ONE answer:

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

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

Accounting Multiple Choice Question – 25 July 2023

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

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The cost of sales of Alex ltd comprises of direct materials and direct labour.

At the end of a trading period the following variances are calculated.

  • direct materials price variance – £1,400 FAV
  • direct materials usage variance – £900 ADV
  • direct labour efficiency variance – £500 FAV
  • direct labour rate variance – £1,200 ADV

If the actual cost of sales was £18 500, what was the standard cost of sales?

Select ONE answer:

  1. £18,100
  2. £18,300
  3. £18,500
  4. £18,700

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 – £18,500 + £1,400 – £900 + £500 – £1,200
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 24 July 2023

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

apple devices books business coffee
Photo by Serpstat on Pexels.com

The following information about the sale of a product is given:

  • Budget sales volume in units – 1,000
  • Budget sales revenue – £10,000
  • Actual sales volume in units – 900
  • Actual sales revenue – £9,900

Which of the following is true?

Select ONE answer:

  1. Sales price variance – £100 ADV & Sales volume variance – £NIL
  2. Sales price variance – £NIL & Sales volume variance – £100 ADV
  3. Sales price variance – £900 FAV & Sales volume variance – £1,000 ADV
  4. Sales price variance – £1,000 ADV & Sales volume variance – £900 FAV

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 – Sales Price Variance=(AP − SP)× Units Sold where AP=Actual selling price & SP=Standard price AND Sales volume variance = (Actual units sold – Budgeted units sold) x Budgeted price per unit. Therefore SPV = £11 – £10 * 1,000 == > £900 FAV AND SVV = 9000 – 1,000 * £10 == > £1,000 ADV
  4. Not correct

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