Tag: Taxes

Accounting Multiple Choice Question – 30 September 2024

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

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Lucy’s net assets have increased by £127,000 over the year.

She took drawings of £47,000 and paid in to the business the proceeds of a personal life insurance policy amounting to £25,000.

Her net profit for the year was?

Select ONE answer:

  1. £815
  2. £810
  3. £825
  4. £820

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 – There are only (25 – 10 + 10 – 10) = 15 units in stock at the end of January. 10 of these are valued at £55, and the remainder at £54: (10 × £55) + ( 5 × £54) = £820

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Accounting Multiple Choice Question – 29 September 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, has been unable to calculate his business’ profit or loss for the year ended 31 December 2023 as a fire destroyed most of his accounting records.

He has, however, been able to provide the following information to his accountant.

(1) Net assets at 31 December 2022 were £23,000 and £32,500 as at 31 December 2023

(2) Alex introduced additional capital during the year of £4,000 in cash

(3) He took cash drawings of £2,500 and goods with a selling price of £800. The cost of the goods was £750 when purchased.

What was Alex’s profit or loss for the year ended 31 December 2023?

Select ONE answer:

  1. £8,750 profit
  2. £(1,750) loss
  3. £9,800 profit
  4. £(2,750) loss

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 – Opening capital £23,000 + Capital injection £4,000 – Drawings (£2,500 + £750) £3,250 = £23,750 == > Difference to Closing capital of £32,500 is profit = £8,750
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 28 September 2024

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

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The net assets of Alex’s business (who is a sole trader) decreased by £11,025 over the year to 31 October 2023.

During that year Alex had paid in additional capital of £14,000, drawn £875 in cash each month and on one occasion, taken goods costing £2,625 for his own use.

The loss made by the business for the year ended 31 October 2023 was?

Select ONE answer:

  1. £10,150
  2. £11,900
  3. £21,525
  4. £25,025

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 – Decrease in net assets £11,025 + Capital introduced £14,000 – Drawings (875 ×12) £10,500 = Loss £11,900
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 27 September 2024

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

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A local taxes prepayment of £475 at the reporting date for his financial statements was treated as an accrual in preparing Alex’s a sole trader’s income statement.

As a result, Alex’s profit was?

Select ONE answer:

  1. Understated by £950
  2. Overstated by £950
  3. Understated by £475
  4. Overstated by £475

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 – Understated by 2 x £475 = £950
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 26 September 2024

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

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On 1 April 2023, Alex who is a sole trader paid £3,080 in local taxes for the year ending 31 March 2024.

This was an increase of 10% on the charge for the previous year.

What is the correct charge for local taxes in Alex’s profit and loss account for the year ended 31 December 2023?

Select ONE answer:

  1. £2,870
  2. £3,003
  3. £3,010
  4. £3,080

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 == > £3,080 × 9/12 + £3,080 * 1.1 * 3/12 = £3,010
  4. Not correct

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