Accounting Multiple Choice Question – 10 May 2020

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

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

A limited company‘s revenue reserves increased from £15,000 at 1 January to £31,000 at 31 December.

If the company earned a profit for the year of £27,000, after tax dividends for the year were?

Select ONE answer:

  1. £4,000
  2. £11,000
  3. £12,000
  4. £45,000

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 – Earning a profit will increase revenue reserves while paying (or proposing) dividends will reduce revenue reserves.  Therefore, revenue reserves at 31 December = revenue reserves at 1 January + profit – dividends.  Therefore, £31,000 = £15,000 + £27,000 – dividends.  Therefore, dividends = £11,000.
  3. Not correct
  4. Not correct

     

 

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

Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s