Tag: Accountants

Accounting Multiple Choice Question – 15 March 2024

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

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On 1 January 2023, Alex Trading Ltd purchased some plant.

The invoice showed

  • Cost of plant – £48,000
  • Delivery to factory – £400
  • One year warranty covering breakdown during – £800
  • Total – £49,200

Modifications costing £2,200 were necessary to enable the plant to be installed.

What amount should be capitalised for the plant in the company’s records?

Select ONE answer:

  1. £51,400
  2. £48,000
  3. £50,600
  4. £48,400

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 – 48,000 + 400 + 2,200 = 50,600
  4. Not correct

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Accounting Multiple Choice Question – 14 March 2024

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

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Alex Trading’s asset register shows a total carrying amount of £145,600.

The non-current asset accounts in the nominal ledger show a carrying amount of £135,600.

The difference is due to an asset having been disposed of but not having been eliminated from the asset register.

This disposal could have taken place….?

Select ONE answer:

  1. With disposal proceeds of £15,000 and a profit on disposal of £5,000
  2. With disposal proceeds of £15,000 and a carrying amount of £5,000
  3. With disposal proceeds of £15,000 and a loss on disposal of £5,000
  4. With disposal proceeds of £5,000 and a carrying amount of £5,000

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 1

  1. Correct – If disposal proceeds were £15,000 and profit on disposal is £S,000, then carrying amount must be £10,000, the difference between the asset register figure and the non-current asset account in the nominal ledger
  2. Not correct
  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 – 13 March 2024

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

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An asset register showed a total carrying amount of £67,460.

A non-current asset costing £15,000 had been sold for £4,000, making a loss on disposal of £1,250.

No entries had been made in the asset register for this disposal.

The correct balance on the asset register is?

Select ONE answer:

  1. £42,710
  2. £51,210
  3. £53,710
  4. £62,210

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 –  Balance b/d £67,460  Less: Cost of non-current asset sold £15,000 Add: accumulated depreciation of asset sold (15,000 -(4,000 + 1,250)) = £62,210

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Accounting Multiple Choice Question – 12 March 2024

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

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An asset was purchased by Alex Trading plc on 1 January 2021 for:

  • Cost – £1,000,000
  • Annual licence fee – £15,000
  • Total – £1,015,000

The business adopts a date of 31 December as its reporting year end.

The asset was traded in for a replacement asset on 1 January 2024 at an agreed value of £500,000.

It has been depreciated at 25% per annum on the reducing-balance method.

What figure is included regarding this disposal in the income statement for the year ended December 2024?

Select ONE answer:

  1. £25,000 profit
  2. £78,125 profit
  3. £62,500 loss
  4. £250,000 loss

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 – £ Cost 1,000,000
    • 2021 Depreciation – £250,000 NBV 750,000
    • 2022 Depreciation – £187,500 NBV 562,500
    • 2023 Depreciation – £140,625 NBV 421,875
    • 2024 Part Exchange – £500,000 Profit £78,125
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 11 March 2024

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

Photo by Nataliya Vaitkevich on Pexels.com

Alex Trading plc bought a machine for £5,000 on 1 January 2021, when it had an expected useful life of four years and an expected residual value of £1,000.

Straight-line depreciation is to be applied on a monthly basis.

On 31 December 2023, the machine was sold for £1,600.

The amount to be entered in the 2023 income statement for profit or loss on disposal is?

Select ONE answer:

  1. profit of £600
  2. loss of £600
  3. profit of £350
  4. loss of £400

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 – (£5,000 – £1,000)/4 = £1,000 depreciation per annum for 3 years.    Dr Cost £5000 vs CR Depreciation £3,000 + Proceeds £1,6000 + Loss £400

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