The Multiple Choice Questions Blog

What is required to be disclosed in the directors’ report?

Select ONE answer:

1. accounting policies
2. directors’ remuneration
3. earnings per share
4. the main activity of the company

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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Alex agrees to sell his business.

The value of the business being sold is shown.

• goodwill £32k
• fixed assets £100k
• current assets £60k
• current liabilities £12k

The purchase consideration is shares with a nominal value of £1, to be issued at a premium of £0.20.

How many shares will Alex receive?

Select ONE answer:

1. 150,000
2. 160,000
3. 170,000
4. 180,000

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 3

1. Not correct
2. Not correct
3. Correct – £32k + £100k + £60k + £12k = £204k / £1.2 per share = 170,000 shares
4. Not correct

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

Alex plc’s SOFP showed the following:

• net assets – £10M
• £1 ordinary shares – £5M
• Retained earnings – £5M

The company intends to purchase one million of its own shares at a price of £1.50 per share.

What is the value of the resulting balance on retained earnings AFTER the purchase?

Select ONE answer:

1. £3.5 million
2. £4.0 million
3. £4.5 million
4. £5.0 million

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 – 1M * £1.5 each = £1.5M == > Dr Shares £1M Dr Retained Earnings £0.5M Cr Cash £1.5M
4. Not correct

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

During the year ended 31 March 2022, Alex plc sold plant and machinery for £8,000.

This plant had cost £60,000 and had a book value of £10,000.

An additional £140,000 was spent on new plant and machinery, which was depreciated at the end of the year by 20%.

In preparing the cash flow statement at the end of the year, how are the above transactions shown under the capital expenditure heading?

Select ONE answer:

1. Cash Inflow £NIL and Cash Outflow £132,000
2. Cash Inflow £8,000 and Cash Outflow £112,000
3. Cash Inflow £8,000 and Cash Outflow £140,000
4. Cash Inflow £10,000 and Cash Outflow £140,000

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 1

1. Correct – £140k – £8k
2. Not correct
3. Not correct
4. Not correct

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

Which decreases the net cash inflow from operating activities?

Select ONE answer:

1. decrease in stock
2. increase in creditors
3. increase in debtors
4. repayment of borrowings

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

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