Tag: Inventory Valuation

Accounting Multiple Choice Question – 19 October 2023

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

Photo by Pixabay on Pexels.com

Alex Trading Ltd provides the following data for the year:

  • budgeted output (units) – 10,000 units
  • actual output (units) – 8,000 units
  • budgeted fixed production costs – £1,200,000
  • budgeted variable production costs – £800,000
  • budgeted fixed selling overhead – £600,000

What is the absorption cost per unit used for stocktaking?

Select ONE answer:

  1. £200
  2. £250
  3. £260
  4. £325

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 == > £1,200k + £800k / 10,000 units
  2. Not 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 – 7 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 uses the weighted average cost (AVCO) method of stock valuation.

During March the following transactions took place.

  • 1 March – opening stock 200 units at £6.00 per unit – £1,200
  • 14 March – received 300 units at £6.50 per unit – £1,950
  • 20 March – issued 250 units to production at £7.00 per unit – £1,750
  • 28 March – received 100 units at £6.70 per unit – £670

What is the value of stock at 31 March?

Select ONE answer:

  1. £2,195
  2. £2,245
  3. £2,295
  4. £2,450

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 == > (£1,200 + £1,950) / 500 = £6.3 * 250 + £670
  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 – 6 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

The inventory records of a Alex Trading Ltd show the following information for product Z:

  • 1 January: opening balance – 100 units at a value of £3
  • 3 January: receipts into inventory – 50 units at a value of £4
  • 8 January: inventory issued – 120 units

What is the value of the inventory issued on 8 January using the First In First Out (FIFO) method?

Select ONE answer:

  1. £360
  2. £380
  3. £410
  4. £420

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 == > £100 * £3 + 20 * £4
  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 -4 October 2023

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

Alex Trading sells some of its inventory for £100 on credit to a customer.

The inventory originally cost £50.

Which statement below reflects the effect of this transaction on the statement of financial position?

Select ONE answer:

  1. current assets: decrease by £50 AND owner’s capital: decreases by £50
  2. current assets: decrease by £50 AND owner’s capital: increases by £50
  3. current assets: increase by £50 AND owner’s capital: decreases by £50
  4. current assets: increase by £50 AND owner’s capital: increases by £50

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

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

Accounting Multiple Choice Question -30 September 2023

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

Closing inventory has been undervalued.

What is the effect of this error on the financial statements?

Select ONE answer:

  1. net current assets: no effect AND profit for the year: understated
  2. net current assets: overstated AND profit for the year: overstated
  3. net current assets: understated AND profit for the year: no effect
  4. net current assets: understated AND profit for the year: understated

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

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