Tag: Accounting Equation

Accounting Multiple Choice Question – 22 January 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 borrows £10,000 from a bank.

Which elements of the accounting equation will change due to this transaction?

Select ONE answer:

  1. Assets and liabilities
  2. Assets and capital
  3. Capital and liabilities
  4. Assets 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 1

  1. Correct -Assets increase as cash on receipt of the loan funds, and liabilities will increase as the loan is a liability.
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 21 January 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 purchased some goods on credit.

Which elements of the accounting equation will change due to this transaction?

Select ONE answer:

  1. Assets and liabilities
  2. Assets and capital
  3. Capital and liabilities
  4. Assets 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 1

  1. Correct -Assets will increase as Alex Trading has acquired inventory, and liabilities will increase as the goods were purchased on credit.
  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 – 20 January 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 is £5,000 overdrawn at his bank and then receives £2,000 from a credit customer in respect of an overdue invoice.

Which elements of the accounting equation will change due to this transaction?

Select ONE answer:

  1. Assets and liabilities only
  2. Liabilities only
  3. Assets only
  4. Assets, liabilities and capital

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 – The overdraft liability will decrease, and receivables will decrease by an equal amount.
  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 – 29 December 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 accounting equation can be written as?

Select ONE answer:

  1. Assets + profits – drawings – liabilities = closing capital
  2. Assets – liabilities – drawings = opening capital + profit
  3. Assets – liabilities – opening capital + drawings = profit
  4. Opening capital + profit – drawings –liabilities = 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 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 – 13 October 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 information has been taken from a recent statement of financial position of Alex Trading:

  • non-current assets – £30,000
  • working capital ratio – 5:1
  • capital – £34,000
  • current liabilities – £1,000

What is the amount of the current assets?

Select ONE answer:

  1. £1,000
  2. £5,000
  3. £6,000
  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 == > A-L = C therefore £30k – £1k = £29k thus CA are £5k or wcr of 5:1 means £5k / £1K = 5:1
  3. Not correct
  4. Not correct

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