Tag: Partners

Accounting Multiple Choice Question – 15 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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What journal is necessary to record interest payable on partners’ drawings?

Select ONE answer:

  1. Debit Partners’ drawings accounts, Credit Partners’ current accounts
  2. Debit Profit and loss appropriation account, Credit Partners’ drawings accounts
  3. Debit Partners’ drawings accounts, Credit Interest payable account
  4. Debit Partners’ current accounts, Credit Profit and loss appropriation account

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 == >. Interest payable by partners increases the amounts of profits available for appropriation (credit appropriation account) it must be charged against the partners’ current accounts (debit partners’ current accounts).

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Accounting Multiple Choice Question – 14 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 journals records interest earned on partners’ capital account balances?

Select ONE answer:

  1. Debit Partners’ current accounts, Credit Profit and loss appropriation account
  2. Debit Profit and loss appropriation account, Credit Partners’ current accounts
  3. Debit Profit and loss appropriation account, Credit Cash at bank
  4. Debit Profit and loss appropriation account, Credit Partners’ capital accounts

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 == > Interest on partners’ capital is an appropriation of profit (debit appropriation account). Since partners have earned the money by their investment in the business, their current accounts should be credited with it (Option 4 would be theoretically possible, but most firms maintain current accounts separately from capital accounts to record such items).
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 13 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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How should interest charged on partners’ drawings be dealt with ni partnership financial statements?

Select ONE answer:

  1. Credited as income in the income statement
  2. Deducted from profit ni allocating the profit among the partners
  3. Added to profit in allocating the profit among the partners
  4. Debited as an expense in the income statement.

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 == > Added to profit in allocating the profit among the partners
  4. Not correct

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