Tag: Accounting

Accounting Multiple Choice Question – 17 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 following information has been extracted from Alex Trading’s books of accounts on the last day of the financial year, 31 December 2023?

  • Revenue – £ 35,860
  • Inventory at 1 January 2023 – £4,070
  • Inventory at 31 December 2023 – £5,160
  • Purchases – £10,800
  • Returns outwards – £3,100
  • Returns inwards – £2,840

What is the value of ‘Cost of Sales’ that will be shown in the Income Statement for the year ended 31st May 2023?

Select ONE answer:

  1. £29,250
  2. £9,710
  3. £6,610
  4. £6,870

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 – £4,070 + £10,800 – £3,100 – £5,160
  4. Not correct

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Accounting Multiple Choice Question – 16 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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A business buys, on credit, a new machine for their factory from Alex Trading Ltd.

The double entry to record this transaction is?

Select ONE answer:

  1. account to be debited: MACHINERY and account to be credited: ALEX TRADING LTD
  2. account to be debited: MACHINERY and account to be credited: BANK
  3. account to be debited: PURCHASES and account to be credited: ALEX TRADING LTD
  4. account to be debited: PURCHASES and account to be credited: BANK

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 account that is debited is the NCA account, ‘machinery’. This ensures that the new machine is correctly shown in the SOFP. The ‘purchases’ account is only used for the purchase of goods for re-sale. The credit entry is to the relevant accounts payables account, which uses the name of the supplier, to show that money is owed to the supplier, as ALEX TRADING LTD account is a current liability account.
  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 – 15 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 most important benefit of running a business as a limited company is?

Select ONE answer:

  1. There are several owners
  2. The company has limited liability
  3. The shareholders receive dividends
  4. The shareholders benefit from limited liability

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 – Limited liability is a protection that benefits shareholders, not the company itself. It means that the shareholders are not personally responsible for the debts of the company. As a result, the most a shareholder can lose is the amount they spent on buying the shares.

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Accounting Multiple Choice Question – 14 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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When Alex, who is a sole trader, takes money out of the business for his own personal use, this is called?

Select ONE answer:

  1. Dividends
  2. Drawings
  3. Wages
  4. Profit for the year

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
  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 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 following figures are given for a Alex Manufacturing Ltd’s factory’s overheads and machine hours worked.

   machine hours  total overhead costs  overhead absorption rate

  • budgeted   122,000 hrs   £268,400   £2.20 
  • actual    116,000hrs   £261,000   £2.25

What was the under- or over-absorption of overhead for the quarter?

Select ONE answer:

  1. £5,800 over-absorbed
  2. £5,800 under-absorbed
  3. £7,400 over-absorbed
  4. £7,400 under-absorbed

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 – (6,000 hrs * £2.2) – (£268,400 – £261,000)
  3. Not correct
  4. Not correct

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