Tag: AQA

A particular cost is classified as ‘semi-variable’.

Which effect will a 20% reduction in activity have on the unit cost?

Select ONE answer:

1. decrease by 20%
2. decrease by less than 20%
3. increase by 20%
4. increase by less than 20%

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

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The following information is given for Alex Ltd at 31 December 2020, who’s current ratio is calculated at 3.6: 1

• Average inventory – £12 000
• Accounts receivable – £4 000
• Accounts payable- £5 000

What was the value of inventory at 1 January 2020?

Select ONE answer:

1. £9,400
2. £10,000
3. £12,000
4. £14,000

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 ==>Current Ratio = CA / CL ==> (Inventory + AR) / AP ==> (X + £4k) / £5k. If average inventory is £12k, then total inventory is £24k. EOY Current ratio is therefore (£14k + £4k) / £5k = 3.6 : 1 ==> Thus opening inventory is £10k
3. Not correct
4. Not correct

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

The following information has been calculated from the accounts of a business.

• days taken to pay creditors – 36 days
• days taken by debtors to pay – 65 days
• stock turnover in days – 14 days

What is the cash operating cycle?

Select ONE answer:

1. 15 days
2. 29 days
3. 43 days
4. 79 days

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 ==> 65 + 14 – 35
4. Not correct

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

Which statement correctly expresses the relationship between return on capital employed, net asset turnover and profit margin?

Select ONE answer:

1. net asset turnover = return on capital employed – profit margin
2. profit margin / net asset turnover = return on capital employed
3. profit margin + net asset turnover = return on capital employed
4. return on capital employed = net asset turnover x profit margin

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

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

A company has revalued its fixed assets upwards during the most recent accounting period.

What will be the effect of this?

Select ONE answer:

1. to increase capital employed and increase profits
2. to increase capital employed and reduce profits
3. to reduce capital employed and reduce profits
4. to reduce capital employed and no effect on profits

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

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