Tag: Bookkeeping

Accounting Multiple Choice Question – 20 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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What does the term ‘nominal value of a share’ refer to?

Select ONE answer:

  1. The value that a share is sold by one shareholder to another shareholder for
  2. The price at which a company issues shares to raise money for use within the company
  3. A value chosen by the company when it was set up which is used to value the shares in the Statement of Financial Position
  4. The same value as the average selling price of the goods that the company sells

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 nominal price of a share exists so that the shares can be valued in the SOFP. The nominal value of the shares is chosen when the company is set up.
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 19 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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Lucy Walton runs a small on-line business, selling silver jewellery that she makes in her house.

She uses a variety of equipment to make the silver jewellery, which she depreciates each year.

She keeps the method of depreciation the same from one financial year to the next.

Select ONE answer:

  1. Materiality
  2. Consistency
  3. Business entity
  4. Prudence

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 concept of ‘consistency’ requires that accounting methods are kept the same from one accounting period to the next. This ensures that financial statements from one year can be compared to financial statements for the following year.
  3. Not correct
  4. Not correct

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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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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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