Tag: A-Level

A trader’s purchases on credit for August amounted to £20,000. These purchases were subject to a trade discount of 10% and also a cash discount of 5% for accounts paid within 30 days.

How much was entered in the purchases journal?

Select ONE answer:

1. £17,000
2. £18,000
3. £19,000
4. £20,000

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 – £20,000 * 0.9 = £18,000 (the value of the supplier invoices), The potential cash discount of £1,000 cannot at this stage be taken into account under the prudence concept / cost concept
3. Not correct
4. Not correct

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Lucy issued an invoice, a credit note and a receipt.

What has happened?

Select ONE answer:

1. Lucy purchased goods and paid the supplier immediately.
2. Lucy purchased goods on credit, made returns to the supplier and paid the balance due.
3. Lucy sold goods and received immediate payment from the customer.
4. Lucy sold goods on credit, received returns from the customer and received the balance due.

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 – accrual
2. Not correct
3. Not correct
4. Not correct

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The following ledger account appeared in the books of a trader.

Select ONE answer:

1. rent payable outstanding
2. rent payable prepaid
3. rent receivable outstanding
4. rent receivable prepaid

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 – accrual
2. Not correct
3. Not correct
4. Not correct

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At the end of the financial year there was a debit balance brought down on the office expenses account.

In which section of the statement of financial position will this be recorded?

Select ONE answer:

1. capital
2. current assets
3. current liabilities
4. non-current assets

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 – prepayment
3. Not correct – that would be be a credit balance / accrual
4. Not correct

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What are assets?

Select ONE answer:

1. items that are bought for long-term use by a business
2. items that are expected to be turned into cash in the near future
3. items that are owned by or owed by a business
4. items that are owned by or owed to a business 

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 – purchase returns
2. Correct
3. Not correct – purchase returns
4. Not correct – increases debt owed by Stuart

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