Tag: Accounting

Which of the following correctly lists items to be shown in a partnership appropriation account?

Select ONE answer:

1. drawings, interest on drawings, partnership salaries
2. interest on drawings, interest on a partner’s loan, shares of residual loss
3. interest on capital accounts, interest on drawings, partnership salaries
4. interest on a partner’s loan, partnership salaries, shares of residual profit
5. drawings, partnership salaries, shares of residual profit

Define and explain the differences between interest on capital accounts and interest on drawings:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 3 – The distribution of profits is calculated after the net profit or net loss in the Profit and loss account. The accounts appropriated in this account are: Interest on capital accounts; Partners’ salaries; Interest on drawings.

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A sole trader received an order from a credit customer on the last day of the financial year 31 May 2016. No entries were made in the accounting records for the sale of goods until the invoice was raised on 3 June 2016 when the goods were shipped.

Which accounting concept is being applied?

Select ONE answer:

1. Consistency
2. Going concern
3. Prudence
4. Realisation
5. Separate Entity

Define and explain the accounting convention of ‘Materiality’?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 4 – With this convention, the accounts recognise any transactions (and any profits arising from them) at the point of sale or transfer of legal ownership – rather than just when cash actually changes hands. For example, a company that makes a sale to a customer can recognise that sale when the transaction is legal – at the point of contract. The actual payment due from the customer may not arise until several months later, if the customer has been granted some credit terms. In this case an order has been received on the last day of the financial year 31 May 2016, but the actual good were shipped on 3 June 2016, and it is at this point that the sale is related and the appropriate entries for this credit customer raised of Dr Debtors Cr Sales.

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The following information was provided by a sole trader for the year ended 31 December 2015.

 

What was the business’s profit or loss for 2015?

Select ONE answer:

1. Loss £8,000
2. Loss £14,000
3. Loss £11,000
4. Profit £8,000
5. Profit £14,000

Show your workings to arrive at your answer, and explain and justify your reasons?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 4 – The calculation is as follows: Capital at 31 December 2015 is £29,000 + Drawings of £11,000 making a total of £40,000. Subtract the Capital 1 January 2015 of £32,000 implies that a profit of £8,000 was made by the business in 2015.

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A sole trader has not maintained proper books of account. The following information is available relating to trade receivables for the year ended 30 June 2016.

 

What is the value of credit sales for the year ended 30 June 2016?

Select ONE answer:

 

1. £196,000
2. £200,000
3. £210,000
4. £212,000
5. £214,000

Show your workings to arrive at your answer, and explain and justify your reasons?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 3 – The calculation is as follows: Receipts from trade receivables £205,000 + Sales Returns £7,000 + Trade Receivables at 30 June 2016 of £12,000 – Trade Receivables at 1 July 2015 of £14,000

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A bookkeeper recorded a payment for vehicle repairs in the vehicles account. Which of the following correctly describes the type of error and corrections to be made?

Select ONE MOST LIKELY answer:

 

What is the definition of an accounting error of principle?……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Accounting KS5 classes.

The answer is 5 – An accounting error is a non-fraudulent discrepancy in financial documentation. The error of commission is a transaction that is calculated incorrectly. An error of principle is a procedural error, meaning that the value recorded was the correct value but placed incorrectly. This is an error of principle, so the value needs to be moved from vehicles to which it was originally debited (the original credit was to cash or bank) to vehicle repairs.

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