Tag: Topic 6

Accounting Multiple Choice Question – 11 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 assertions about cash flow statements is/are correct?

  1. A cash flow statement prepared using the direct method produces a different figure for net cash flow from operating activities to that produced when the indirect method is used.
  2. Capital introduction do not feature in cash flow statements.
  3. A bonus issue will not appear as an item in a cash flow statement of a sole trader
  4. A profit on the sale of a non-current asset will appear as an item under Capital Expenditure in a cash flow statement.

Select ONE answer:

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

  1. Not correct
  2. Not correct
  3. Correct
  4. Not correct

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Accounting Multiple Choice Question – 10 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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Part of a draft cash flow statement is shown below:

Operating profit   £8,640

Depreciation charges   (£2,160)

Proceeds of sale of non-current assets  £360

Increase in Inventory   (£330)

Increase in accounts payable   £440

The following criticisms of the above extract have been made:

1.Depreciation charges should have been added, not deducted.

2.Increase in inventory should have been added, not deducted.

3.Increase in accounts payable should have been deducted, not added.

4.Proceeds of sale of non-current assets should not appear in this part of the cash flow statement.

Select ONE answer:

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

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
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 9 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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In the course of preparing a sole trader’s cash flow statement, the following figures are to be included in the calculation of net cash from operating activities.

Depreciation charges – £980,000
Profit on sale of non-current assets – £40,000
Increase in inventory – £130,000
Decrease in accounts receivables – £100,000
Increase in accounts payable – £80,000

What will the net effect of these items be in the cash flow statement?

Select ONE answer:

  1. Addition to operating profit – £890,000
  2. Subtraction from operating profit – £890,000
  3. Addition to operating profit – £1,070,000
  4. Addition to operating profit – £990,000

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 – Add depreciation charge == > Less profit on sale of non-current assets == > Less increase in inventory == > Add decrease in accounts receivables == > Add increase in accounts payable = Addition to operating profit

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Accounting Multiple Choice Question – 8 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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Part of the process of preparing a sole trader’s cash flow statement is the calculation of cash inflow from operating activities.

Which of the following statements about that calculation (using the indirect method) are correct?

1 Loss on sale of operating non-current assets should be deducted from operating profits.
2 Increase in inventory should be deducted from operating profits.
3 Increase in accounts payable should be added to operating profits.
4 Depreciation charges should be added to operating profits.

Select ONE answer:

  1. 1, 2 and 3
  2. 1, 2 and 4
  3. 1, 3 and 4
  4. 2, 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 – Loss on sale of NCA should be added back to net operating profits.

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Accounting Multiple Choice Question – 7 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 a trading business on 1 May 2023 with capital of £40,000.

In his first year of trading, he made a profit for the year of £117,000, selling goods at a mark-up on cost of 60%.

He injected additional capital of £30,000 in the year and withdrew a monthly amount of £3,200 for his living expenses.

He also took drawings from his inventory of goods for his own use with a resale value of £7,200.

He had no inventory at the year end.

What were Alex’s net assets as at 30 April 2024?

Select ONE answer:

  1. £141,400
  2. £144,100
  3. £144,280
  4. £179,300

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 – Opening net assets £40,000 + profit for the year £117,000 + Capital Injection £30,000 – Drawings (12 * £3,200) £38,400 – Goods Taken For Own Use (£7,2000 * 100/160) £4,500 == > £144,100
  3. Not correct
  4. Not correct

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