Tag: A-Level

A wholesaler sold 55 items to a retailer at a price of £20 each, less 20% trade discount.

The retailer subsequently returned twelve of the items.

As a result of this, the retailer should be sent a credit note for …

Select ONE answer:

1. £172
2. £192
3. £240
4. £288

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. Incorrect
2. Correct – Cost of items returned = (£20 less 20%) each = £16 each As 12 items were returned, the total cost of all of the items returned is £16 each x 12 = £192
3. Incorrect
4. Incorrect

 

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The data entered in the Returns Outwards Journal comes from . . .

Select ONE answer:

1. invoices sent to customers.
2. invoices received from suppliers.
3. credit notes sent to customers.
4. credit notes received from suppliers.

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. Incorrect – Invoices sent to customers are recorded in the sales journal.
2. Incorrect – Invoices received from suppliers are recorded in the purchases journal.
3. Incorrect – Credit notes sent to customers are recorded in the returns inwards journal.
4. Correct

 

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Credit notes issued by a firm should initially be recorded in . . .

Select ONE answer:

1. the sales account in its nominal (general) ledger.
2. the returns inwards account in its nominal (general) ledger.
3. the returns inwards journal.
4. the returns outwards journal.

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. Incorrect – Credit notes should first be entered in the returns inwards journal, the total of which is posted to the returns inwards account, not the sales account. Only sales (the total of the sales journal) should be recorded in the sales account. Sales returns (returns inwards) should not be netted off against sales in the sales account.
2. Incorrect – The total of credit notes issued by a firm will eventually end up in its returns inwards account – but only after being posted from the returns inwards journal.
3. Correct
4. Incorrect – It is credit notes received by a firm which are initially recorded in the returns outwards journal.

 

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A firm which purchased five items on credit at a cost of £80 each, less 25% trade discount, is entitled to deduct a cash discount of 5% if it pays for them, in full, within 14 days of the invoice date.

If the firm pays within the above two-week period, it will have to pay:

Select ONE answer:

1. £260
2. £280
3. £285
4. None of the above.

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. Incorrect
2. Incorrect
3. Correct – 5 items @ £80 each = £400 Less 25% trade discount = -£100 Less 5% cash discount (5% of the net cost of £300) = -£15 Equals = £285
4. Incorrect

 

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The total of the purchase invoices recorded in the Purchases Journal is posted to…?

Select ONE answer:

1. the credit side of the purchases account in the general ledger.
2. the debit side of the purchases daybook.
3. the credit side of the purchases daybook.
4. the debit side of the purchases account in the general ledger.

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. The total of the purchase invoices recorded in the purchases journal is posted to the debit side of the purchases account in the general ledger.
2. ‘Posting’ means transferring totals from the books of original entry to the double-entry accounting records. The purchases daybook is not part of these records – in fact, it is the same as the purchases journal.
3. As for answer B above.
4. Correct

 

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