Tag: Accounting

A wholesaler sold goods to Alex on credit. Alex was unable to pay the amount owing and the balance on his account was written off by the wholesaler.

Which entries will the wholesaler make to write off this irrecoverable debt?

Select ONE answer:

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 – Dr P&L Cr Current Assets
3. Not correct
4. Not correct

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Why should accrued expenses be shown in the financial statements of a business?

Select ONE answer:

1. so that the correct total of current assets is shown in the statement of financial position
2. so that the total income of a period is matched against the total costs of that period
3. to show how much customers owe the business
4. to show the amount owed to credit 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 2

1. Not correct
2. Correct – the accruals principle
3. Not correct
4. Not correct

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

Alex depreciates his buildings at the rate of 2% per annum using the straight line method.

He bought land for £200,000. It cost Alex £120,000 to build a warehouse on it. After five years, Alex sold the warehouse for £299,000.

What was the profit or loss on disposal?

Select ONE answer:

1. £9,000 loss
2. £9,000 profit
3. £12,000 loss
4. £12,000 profit

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 – £200k + £120k = £320k – (5 years * £2.4k p.a.) – £299k = £9 loss
2. Not correct
3. Not correct
4. Not correct

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

For which non-current assets is the revaluation method of depreciation most appropriate?

Select ONE answer:

1. loose tools
2. motor vehicles
3. office equipment
4. plant and machinery

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
2. Not correct
3. Not correct
4. Not correct

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

Lucy bought a computer for £800, and some ink cartridges for £50 to be used in the business. Both of these amounts were debited to the purchases account.

What was the effect of this error on the income statement for the year?

Select ONE answer:

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 – computer should be NCA & ink cartridges should be Expenses
3. Not correct
4. Not correct

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