Tag: Bookkeeping

Accounting Multiple Choice Question – 12 October 2024

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

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Alex, a sole trader, does not keep a sales ledger control account or a sales daybook and is not registered for VAT.

The bookkeeper, Lucy, has discovered the following errors and omissions in Alex’s accounting records:

a cheque for £180 from a customer has been returned unpaid by the bank. No entries have been made in the accounting records for the return of the cheque

(2) a credit note for £12 was sent to a customer but was mistaken for an invoice by Alex when recording it in the daybooks.

Which of the following journals will be entered in Alex’s general ledger accounts to correct these errors?

Select ONE answer:

  1. Debit Receivables £156, Debit Sales £24, Credit Cash £180
  2. Debit Cash £180, Credit Receivables £156, Credit Sales £24
  3. Debit Receivables £168, Debit Sales £12, Credit Cash £180
  4. Debit Bad debts expense £180, Debit Receivables £24, Credit Cash £180, Credit Sales £24

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 == > Debit Receivables £180 Debit Sales (2 * £12) £24 = £204 — > Credit Cash £180 Credit Receivables £24 = £204
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 11 October 2024

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

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Which of the following assertions about cash flow statements is/are correct?

  1. A cash flow statement prepared using the direct method produces a different figure for net cash flow from operating activities to that produced when the indirect method is used.
  2. Capital introduction do not feature in cash flow statements.
  3. A bonus issue will not appear as an item in a cash flow statement of a sole trader
  4. A profit on the sale of a non-current asset will appear as an item under Capital Expenditure in a cash flow statement.

Select ONE answer:

  1. 1 and 4
  2. 2 and 3
  3. 3 Only
  4. 2 and 4

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. Not correct

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Accounting Multiple Choice Question – 10 October 2024

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

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Part of a draft cash flow statement is shown below:

Operating profit   £8,640

Depreciation charges   (£2,160)

Proceeds of sale of non-current assets  £360

Increase in Inventory   (£330)

Increase in accounts payable   £440

The following criticisms of the above extract have been made:

1.Depreciation charges should have been added, not deducted.

2.Increase in inventory should have been added, not deducted.

3.Increase in accounts payable should have been deducted, not added.

4.Proceeds of sale of non-current assets should not appear in this part of the cash flow statement.

Select ONE answer:

  1. 2 and 3 only
  2. 1 and 4 only
  3. 1 and 3 only
  4. 2 and 4 only

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. Notcorrect
  2. Correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 9 October 2024

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

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In the course of preparing a sole trader’s cash flow statement, the following figures are to be included in the calculation of net cash from operating activities.

Depreciation charges – £980,000
Profit on sale of non-current assets – £40,000
Increase in inventory – £130,000
Decrease in accounts receivables – £100,000
Increase in accounts payable – £80,000

What will the net effect of these items be in the cash flow statement?

Select ONE answer:

  1. Addition to operating profit – £890,000
  2. Subtraction from operating profit – £890,000
  3. Addition to operating profit – £1,070,000
  4. Addition to operating profit – £990,000

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – Add depreciation charge == > Less profit on sale of non-current assets == > Less increase in inventory == > Add decrease in accounts receivables == > Add increase in accounts payable = Addition to operating profit

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Accounting Multiple Choice Question – 8 October 2024

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

Photo by Nataliya Vaitkevich on Pexels.com

Part of the process of preparing a sole trader’s cash flow statement is the calculation of cash inflow from operating activities.

Which of the following statements about that calculation (using the indirect method) are correct?

1 Loss on sale of operating non-current assets should be deducted from operating profits.
2 Increase in inventory should be deducted from operating profits.
3 Increase in accounts payable should be added to operating profits.
4 Depreciation charges should be added to operating profits.

Select ONE answer:

  1. 1, 2 and 3
  2. 1, 2 and 4
  3. 1, 3 and 4
  4. 2, 3 and 4

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 – Loss on sale of NCA should be added back to net operating profits.

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