Tag: Capital Investment

Accounting Multiple Choice Question – 10 March 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 statements about intangible assets in public company financial statements are correct?

1.Internally generated goodwill should not be capitalised.

2.Purchased goodwill should normally be amortised through the income statement.

3.Development expenditure must be capitalised if certain conditions are met.

Select ONE answer:

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

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 – Purchased goodwill is retained in the statement of financial position subject to an impairment review.
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 9 March 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 is excluded from the cost of a tangible non-current asset?

Select ONE answer:

  1. Site preparation costs
  2. Legal fees
  3. Costs of a design error
  4. Installation costs

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 – Any abnormal costs are not directly attributable to the asset and therefore should not be capitalised.
  4. Not correct

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Accounting Multiple Choice Question – 8 March 2024

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

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What is the reasoning behind charging depreciation in historical cost accounting?

Select ONE answer:

  1. To ensure funds are available for the eventual replacement of the asset.
  2. To comply with the consistency concept.
  3. To ensure the asset is included in the statement of financial position at the lower of cost and net realisable value.
  4. To match the cost of the non-current asset with the revenue that the asset generates.

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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Accounting Multiple Choice Question – 7 March 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 Trading plc purchased a car for £18,000 on 1 January 2020.

The car was traded in on 1 January 2022.

The new car has a list price of £30,000 and the garage offered a part-exchange allowance of £5,000.

The company provides depreciation on cars using the reducing balance method at a rate of 25% per annum.

What loss on disposal will be recognised in the income statement of Alex Trading plc for the year ended 31 December 2022?

Select ONE answer:

  1. £5,125
  2. £8,500
  3. £10,125
  4. £11,175

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 – £18,000 x 75% x 75%- 5,000 = £5,125 loss
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 6 March 2024

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

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A car has a list price of £23,500, but the garage gives Alex Trading plc a 10% trade discount.

In settlement the garage accepts a cheque for £18,000, together with an old company car.

The amount to be capitalised by Alex Trading plc for the new car is?

Select ONE answer:

  1. £16,200
  2. £18,000
  3. £21,150
  4. £23,500

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 – £23,500 × 90% = £21,150
  4. Not correct

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