Month: January 2021

A company has issued 8% debentures redeemable 31 December 2020.

Under which heading should the company show the debentures in its Balance Sheet at 31 December 2021?

Select ONE answer:

1. authorised capital
2. creditors : amounts falling due after more than one year
3. creditors : amounts falling due within one year
4. issued share capital

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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A business was purchased by a company for $1.5 million. The table shows an extract from the 

Balance Sheet of the business purchased. 

1. fixed assets – £400,000
2. net current assets – £120,000
3. long-term loan – £200,000

If these values were agreed by the purchasing company, how much was paid for Goodwill? 

Select ONE answer:

1. £520,000
2. £780,000
3. £980,000
4. £1,180,000

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – £400K + £120K – £200K = £320k – £1,500k ===> £1,180k

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

A company has been wound up and the only assets that remain have realised £45,000.

A summary of the company’s capital structure shows:

1. ordinary shares – £20,000
2. preference shares – £40,000
3. loan stock – £30,000

How will the £45,000 be distributed?

Select ONE answer:

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
3. Not correct
4. Not correct

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The information shows the capital and reserves of a company according to its last published accounts. 

1. ordinary shares of £1.00 each – £ 200,000
2. redeemable preference shares of £1.00 each – £50,000
3. Profit and Loss Account – £68,000

The redeemable preference shares were originally issued at par. They have now been redeemed at a premium of 25 %. 

A new issue of 50 000 ordinary shares of £1.00 was made at a premium of £0.15 per share to finance the redemptions. 

What will be the balance on the Share Premium account and Profit and Loss Account after the share redemption? 

Select ONE answer:

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 -50,000 * £0.15 = £7,500 + £68,000 – (50,000 *0.25)
4. Not correct

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The table shows opening and closing balances for the Rent Receivable account.

During the year, £111 000 rental income was received.

What is the total rent receivable for the year? 

Select ONE answer:

1. £110,600
2. £111,000
3. £112,800
4. £114,000

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 – £111,000 + £4,200 – £1,600 – £2,000 + £2,400

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