Accounting Online Program Certification Practice Test

What is the total amount paid for the new machine by Exe plc?

1. £30,000

2. £35,000

3. £40,000

4. £42,440

The correct answer is: £40,000

To determine the total amount paid for the new machine by Exe plc, it's important to consider several factors, such as the purchase price, any additional costs associated with acquiring the machine, and whether any adjustments need to be made for discounts, trade-ins, or financing costs. If the selected answer of £40,000 is the total amount, it could indicate that this figure includes the machine's base price along with any necessary installation fees, taxes, or ancillary costs that are typically incurred when acquiring an asset. For example, if the machine itself has a listed price, but additional expenses make the total higher, the comprehensive total reflects the actual outflow of cash made by Exe plc. When looking at the other amounts, they may represent various components of the transaction, like only the raw cost of the machine or some preliminary estimates that do not include essential additional costs or adjustments. Thus, the chosen figure best encapsulates the complete financial picture regarding the machine acquisition. To verify the accuracy of this total, it can be beneficial to review the specific details surrounding the transaction, ensuring that all costs are accounted for.