Tag: current liabilities

Accounting Multiple Choice Question – 20 January 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 is £5,000 overdrawn at his bank and then receives £2,000 from a credit customer in respect of an overdue invoice.

Which elements of the accounting equation will change due to this transaction?

Select ONE answer:

  1. Assets and liabilities only
  2. Liabilities only
  3. Assets only
  4. Assets, liabilities and capital

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 overdraft liability will decrease, and receivables will decrease by an equal amount.
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 24 December 2023

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

Photo by Olya Kobruseva on Pexels.com

A loan due for repayment in 20 months’ time has been included as a current liability.

What will be the effect when this is corrected?

Select ONE answer:

  1. increase net assets
  2. increase net current assets
  3. no effect on net current assets
  4. reduce net current assets

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

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

Accounting Multiple Choice Question – 28 November 2023

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

Photo by Olya Kobruseva on Pexels.com

A loan due for repayment in 20 months’ time has been included as a current liability.

What will be the effect when this is corrected?

Select ONE answer:

  1. increase net assets
  2. increase net current assets
  3. no effect on net current assets
  4. reduce net current assets

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

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

Accounting Multiple Choice Question – 25 October 2023

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

Photo by Olya Kobruseva on Pexels.com

Alex Trading Ltd shows the following statement of financial position extract as at 31 December 2022.

  • ordinary share capital (£1 each) – £70,000
  • retained earnings – £6,200
  • 6% debentures repayable 2030 – £10,000
  • trade payables – £5,200
  • accruals – £2,700
  • prepayments – £4,100
  • bank overdraft – £20,200

What amount is shown as current liabilities as at 31 December 2022?

Select ONE answer:

  1. £24,000
  2. £28,100
  3. £38,100
  4. £40,200

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 – £5,200 + £2,700 + £20,200
  3. Not correct
  4. Not correct

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