Tag: Financial Accounting

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.

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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

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Accounting Multiple Choice Question – 24 October 2023

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

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Certain information concerning Non-current Assets must be disclosed in the notes to the financial statements.

To which of the following does this rule not apply?

Select ONE answer:

  1. economic useful life of asset
  2. method of depreciation used
  3. scrap value of asset
  4. total depreciation for period

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 – 22 October 2023

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

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Which heading in a company’s cash flow statement would include an investment of surplus funds for six months?

Select ONE answer:

  1. capital expenditure and financial investment
  2. financing
  3. management of liquid resources
  4. returns on investment and servicing of finance

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

Accounting Multiple Choice Question – 15 October 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 profit margins of Alex Trading Ltd over two years showed the following information at the 31 March year-end

  • Gross profit margin: Year 1 – 37.2% AND Year 2 – 39.1 %
  • Net profit margin: Year 1 – 12.2% AND Year 2 – 11.8 %

What combination of factors could have caused these changes?

Select ONE answer:

  1. a change in the combination of goods sold leading to lower selling costs
  2. a loss of trade discounts on purchases but an increase in cash discounts taken from suppliers
  3. an advertising campaign to promote higher sales leading to higher selling prices
  4. an increase in both production and selling 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
  4. Not correct

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

Accounting Multiple Choice Question -14 October 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 data is available at the end of a financial year for Alex Trading Ltd:

  • opening inventory – £500,000
  • purchases – £2,250,000
  • closing inventory – £750,000
  • gross profit margin – 50 %
  • Trade receivables collection period – 60 days

Sales are all made on credit and accrue evenly over the 360-day accounting period.

What is the value of trade receivables at the year-end?

Select ONE answer:

  1. £333,333
  2. £375,000
  3. £500,000
  4. £666,667

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 – COS = £500k + £2,250k – £750k = £2M * 2 = £4M revenue / 360 * 60 == > £666,667

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