Accounting Multiple Choice Question – 27 September 2022

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

Photo by Pixabay on Pexels.com

A company has issued 80 000 shares of £0.50 each.

These are quoted on the stock exchange at £1.60 each.

The company makes a rights issue on a 1 for 4 basis at a price of £1.20 each.

What is the balance on the Share Capital account after the rights issue?

Select ONE answer:

  1. £50 000
  2. £100 000
  3. £120 000
  4. £160 000

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 – 1 in 4 rights issues = 80,000 shares / 4 = 20,000 * 50p = £10,000 + £40,000 = = > £50,000
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 26 September 2022

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

Photo by Olya Kobruseva on Pexels.com

A newly formed company issues

  • 1,000,000 ordinary shares of £1 at £2.50 each
  • £300,000 5% debentures

Operating profit for the year was £465,000.

The directors recommend an 8% ordinary dividend for the year.

What is the retained profit for the year?

Select ONE answer:

  1. £250,000
  2. £370,000
  3. £385,000
  4. £400,000

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 2

  1. Not correct
  2. Correct = £465,000 – (1,000,000 £1 shares * 8%) – (£300,000 5% debentures) = = > £465k – £80k – £15k
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 25 September 2022

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

Photo by Pixabay on Pexels.com

At 1 January 2015 the capital structure of Lucy Limited was as follows.

  • issued share capital 100 000 ordinary shares of £1 each – £100,000
  • share premium account – £30,000

On 1 April 2015 the company made an issue of 20,000 shares for £36,000.

On 1 June 2015 a bonus issue of one share for every six in issue was made.

The share premium account was used for the purpose.

What is the balance on the share premium account at 31 December 2015?

Select ONE answer:

  1. £26,000
  2. £34,000
  3. £46,000
  4. £56,000

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 – 1 April 2015 Dr Bank £26,000 Cr SC £20,000 Cr SP £16,000, then 1 June 2015 Dr SP £20,000 (120,000 shares / 6) Cr SC £20,000 = = > SP Balance £30k + £16k – £20k = ££26k
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 24 September 2022

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

apple devices books business coffee
Photo by Serpstat on Pexels.com

What will increase the working capital and net assets and reserves of a company?

Select ONE answer:

  1. a bonus issue of shares
  2. a debenture issue
  3. an issue of shares at a premium
  4. an issue of shares at nominal value

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

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

Accounting Multiple Choice Question – 23 September 2022

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

Photo by Pixabay on Pexels.com

Alex & Lucy are partners in a business and share profits in the ratio of 3:1

Their net profit for this financial year is £80 000.

The following accounting information is also available:

  • Alex – interest on capital is £3,000 & interest on drawings is £500
  • Lucy – interest on capital is £2,500 & interest on drawings is £1,000

How will the residual net profit be shared?

Select ONE answer:

  1. Alex £57,000 & Lucy £19,000
  2. Alex £58,875 & Lucy £21,125
  3. Alex £59,500 & Lucy £20,500
  4. Alex £60,500 & Lucy £19,500

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 – £80,000 – £3,000 – £2,500 + £500 + £1,000 = £76,000 = = > Divide by 4 then multiply by 3 for Alex’s share
  2. Not correct
  3. Not correct
  4. Not correct

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

%d bloggers like this: