Tag: Sole Trader

Accounting Multiple Choice Question – 6 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 started his business on 1 December 2022 with cash of £5,000.

He has not yet prepared a full set of financial statements.

As at the end of his first reporting period, 30 November 2023, he has cash at bank of £1,726. He made sales of £33,498 during the period and paid expenses in cash of £19,385. He has no outstanding creditors at the end of the period, and has no fixed assets or stock, but one customer owes him £2,387.

Assuming Alex made no other capital injections but took drawings of £15,000 in the period – then identify his profit for the 12-month reporting period to 30 November 2023 and his net assets at the end of the period on an accruals basis of accounting.

Select ONE answer:

  1. Net profit of £11,726, net assets of £1,726
  2. Net profit of £14,113, net assets of £4,113
  3. Net profit of £11,726, net assets of £4,113
  4. Net profit of £14,113, net assets of £1,726

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 – Using the Accounting Equation == > Closing Net Assets (£1,726 + £2,387) £4,113 + Drawings £15,000 – Opening Capital £5,000 = Profit For The Year £14,113
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 5 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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Accounting Multiple Choice Question – 4 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 equations represents the closing capital of a sole trader?

Select ONE answer:

  1. Opening capital – capital introduced + profit – drawings
  2. Opening capital – capital introduced – profit + drawings
  3. Opening capital + capital introduced + profit – drawings
  4. Opening capital + capital introduced – loss + drawings

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 – 3 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 ONE of the following would be classified as current liabilities in the statement of financial position of a sole trader?

Select ONE answer:

  1. Owner’s capital
  2. Petty Cash
  3. Goods Taken For Own Use
  4. Accrued Interest Charges

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

Accounting Multiple Choice Question – 2 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 ONE of the following would be classified as current liabilities in the statement of financial position of a sole trader?

Select ONE answer:

  1. Owner’s capital
  2. Income tax payable
  3. Drawings
  4. Bank overdraft

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 – Income Tax Payable does not feature on a Sole Trader’s statement of financial position

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