Accounting Multiple Choice Question – 5 April 2020

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

At the end of its most recent financial year, a firm, which sells exclusively on credit, was owed £60,000 by its debtors. The firm applies a mark-up of 25% on all goods and allows its debtors 60 days credit (based on 360 days in the firm’s financial year).

Its gross profit for the year was?

Select ONE answer:

  1. £72,000
  2. £90,000
  3. £122,000
  4. £180,000

 

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 – Days credit given = (Debtors / Credit sales) * 360. Therefore 60 = (£60,000 / Credit sales) * 360. Therefore, Credit sales = £360,000. Cost + 25% = £360,000. Therefore, Cost = £288,000. Gross profit = Sales – Cost of sales = £360,000 – £288,000 = £72,000
  2. Not correct
  3. Not correct
  4. Not correct

 

 

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Accounting Multiple Choice Question – 4 April 2020

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

Over the course of an accounting period a business’s debtors increased by £40,000.

If 80% of the business’s total sales of £750,000 were made on credit, no discount was allowed to debtors and no bad debts were written off, the amount of money received from debtors during the period was?

Select ONE answer:

  1. £560,000
  2. £640,000
  3. £710,000
  4. £790,000

 

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 – Let opening debtors = 0. Therefore closing debtors = £40,000. Assume Bank Balance c/d 0 thus Sales (Credit) (£750k * 80%) = £600,000 – Therefore Cr Bank £560,000 Cr Debtors Balance b/d £40,000 = Total £600,000
  2. Not correct
  3. Not correct
  4. Not correct

 

 

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Accounting Multiple Choice Question – 3 April 2020

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

A business’s rate of stock turnover during any given accounting period is calculated as . . .?

Select ONE answer:

  1. the business’ sales for that period divided by the value of its stock at the beginning of the period.
  2. the business’ sales for that period divided by the value of its stock at the end of the period.
  3. the business’ purchases for that period divided by the value of its stock at the end of the period.
  4. the business’ cost of sales for that period divided by the average of the business“ stock during the period (the average being the sum of its stock at the beginning of the period and its stock at the end of the period divided by two).

 

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 – Stock Turnover = Cost of Sales / Average Stock

 

 

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Accounting Multiple Choice Question – 2 April 2020

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

The following information relates, to a sole trader whose financial year ends on 31 December.

  • Sales for the period 1 January – 31 December – £200,000
  • Purchases for the period 1 January – 31 December – £130,000
  • Stock at 1 January – £50,000
  • Percentage mark-up applied on all goods during the period 1 January – 31 December was 25%

The sole trader’s stock as at 31 December, at cost, was?

Select ONE answer:

  1. £20,000
  2. £26,000
  3. £40,000
  4. £70,000

 

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 – Cost of sales + 25% = £200,000 Therefore, Cost of sales = £160,000. Cost of sales = Opening stock + purchases – closing stock. Therefore, £160,000 = £50,000 + £130,000 – closing stock. Therefore, closing stock = £20,000
  2. Not correct
  3. Not correct
  4. Not correct

 

 

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Accounting Multiple Choice Question – 1 April 2020

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

The following information relates to a retail business whose financial year ends on 31 December.

  • Sales for the period 1 January – 31 December – £240,000
  • Stock at 1 January – £10,300
  • Purchases for the period 1 January – 31 December – £186,000
  • Percentage mark-up applied during the period 1 January – 31 December – 33 1/3%

The firm‘s stock as at 31 December at cost was?

Select ONE answer:

  1. £4,300
  2. £16,300
  3. £36,300
  4. None of the above.

 

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 of sales + 33 1/3% = £240,000 Therefore, Cost of sales = £180,000. Cost of sales = Opening stock + purchases – closing stock. Therefore, £180,000 = £10,300 + £186,000 – closing stock. Therefore, closing stock = £16,300
  3. Not correct
  4. Not correct

 

 

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Accounting Multiple Choice Question – 31 March 2020

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

A firm’s cost of sales for a particular accounting period was £16,000. During the period it earned a gross profit margin of 20% on all goods sold.  The firm‘s sales for the accounting period were?

Select ONE answer:

  1. £13,600
  2. £20,160
  3. £21,000
  4. None of the above.

 

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 – Cost of sales = Sales * 100/ 120. £16,000 = Sales * 100/ 120. Therefore, Sales = £16,000 * 120/ 100 = £19,200. Therefore, none of the answers given is correct.

 

 

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Accounting Multiple Choice Question – 30 March 2020

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

A firm’s gross profit margin is 20%. Its mark-up on cost is?

Select ONE answer:

  1. 16 2/3rds %
  2. 22%
  3. 25%
  4. 30%

 

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 – Gross Profit Margin = Gross Profit as a percentage of selling price = 20%.  Let the selling price = £100.  Therefore, gross profit = £20.  Therefore, cost = £80.  The mark-up on cost = Profit as a percentage of cost price.  £20 / £80 = 25%.
  4. Not correct

 

 

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