Tag: Ratio Analysis

Accounting Multiple Choice Question – 7 December 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 has a Trade Receivable days ratio of 40 days based on year-end receivables.

Annual sales are £180,000 of which 13 % are cash sales.

What is the year end receivables figure based on a year of 360 days?

Select ONE answer:

  1. £2,600
  2. £17,400
  3. £20,000
  4. £45,200

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 –£180k * 0.87 = (£156.6 / 360) *40 = £17.4k
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 6 December 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 actions would improve the liquidity (acid test) ratio of Alex Trading Ltd in the short term?

  • receivables paying their debts
  • delaying paying payables
  • selling a number of surplus non-current assets
  • selling inventory

Select ONE answer:

  1. 1 and 2
  2. 2 and 3
  3. 1 and 4
  4. 3 and 4

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 – 5 December 2023

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

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Assets and liabilities of Alex Trading Ltd at its year end include the following information.

  • accruals – £5,000
  • bank overdraft – £6,800
  • cash – £600
  • prepayments – £4,500
  • proposed dividend – £12,000
  • Inventory – £51,800
  • trade payables – £20,100
  • trade receivables – £24,200

What is the current ratio?

Select ONE answer:

  1. 0.67 : 1
  2. 1.85 : 1
  3. 2.19 : 1
  4. 2.54 : 1

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 – (£51,800 + £24,200 + £4,500 + £600) / (£5,000 + £6,800 + £12,000 + £20,100) == > £81,100 / £43,900 == > 1.85 : 1
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 29 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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In the last year Alex Trading purchased inventory using cash for £11,680 and also purchased good for resale on credit for £32,485.

Trade payables were paid every 30 days.

What was the closing accounts payable balance?

Select ONE answer:

  1. £960
  2. £1,710
  3. £2,670
  4. £3,630

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 – 365 days / 30 days = 12.1667 == > £32,485 / 12.1667 = £2,670
  4. Not correct

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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.

apple devices books business coffee
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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.