Tag: A-Level

The accounting year end of a business is 31 October.

On 1 April the business rents out part of its warehouse for an annual rent of £6,000 receivable in equal instalments on 1 April, 1 July, 1 October and 1 January.

At 31 October what would the final accounts show?

Select ONE answer:

1. Profit and Loss Account £ rental income 3,500 / Balance Sheet £ current asset 1,000
2. Profit and Loss Account £ rental income 3,500 / Balance Sheet £ current liability 1,000
3. Profit and Loss Account £ rental income 4,500 / Balance Sheet £ current liability 1,000
4. Profit and Loss Account £ rental income 6,000 / Balance Sheet £ current asset 1,500

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 2

1. Not correct
2. Correct – April £1,500 + July £1,500 + October (£1,500 / 3) ==> therefore October payment Dr Bank £1,500 Cr Rental Income £500 & Current Liability £1,000
3. Not correct
4. Not correct

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Which item below should be treated as capital expenditure?

Select ONE answer:

1. the cost of a new printer for an existing computer system
2. repair costs to a car which are not covered by insurance
3. rent paid on a factory, whilst the company negotiated the purchase of the factory
4. the replacement of a wooden fence with a new fence

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 table shows the calculation of the net present value of a potential project.

Which cash inflow during Year 1 will give a net present value of zero for the project?

Select ONE answer:

1. £5,516
2. £5,560
3. £5,900
4. £6,440

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 – (£5,516 * 0.91) + £4,980 = £10,000
2. Not correct
3. Not correct
4. Not correct

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

Which method of investment appraisal uses profits as the basis for calculation?

Select ONE answer:

1. accounting rate of return
2. discounted cash flow
3. internal rate of return
4. payback

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.