Tag: Topic 3

A business prepares its accounts to 31 December. Insurance premiums paid were:

• date paid January 2021 – paid for 6 months to 31 December 2005 £940
• date paid July 2021 – paid for 6 months to 30 June 2006 £1,120
• date paid January 2022 – paid for 6 months to 31 December 2006 £1,245
• date paid March 2022 – paid for 6 months to 30 June 2007 – £1,880

Which amount should be shown in the profit and loss account for the year ended 31 December 2021?

Select ONE answer:

1. £1,120
2. £2,060
3. £2,365
4. £3,305

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 – £1,120 + £1,245
4. Not correct

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When preparing a sole trader’s annual accounts, no adjustments were made for prepayments at the end of the year.

What is the effect of these omissions?

Select ONE answer:

1. net profit overstated & creditors understated
2. net profit understated & creditors understated
3. current assets overstated & owner’s capital overstated
4. current assets understated & owner’s capital 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

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

The Stafford Accounting club’s income and expenditure (income statement) account for 2022 showed rent and rates as being £4,000.

On 31 December it was noted that rent owing by the club was £600 and rates paid in advance by the club was £800.

What was the amount shown in the receipts and payments account in the cash book for the Stafford Accounting club for rent and rates for the year ended 31 December 2022?

Select ONE answer:

1. £3,800
2. £4,000
3. £4,200
4. £5,400

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 – £4K – £600 + £800
4. Not correct

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