Accounting Multiple Choice Question – 3 April 2021

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

When a company redeems shares, it may create a capital redemption reserve.

Why does it create this reserve?

Select ONE answer:

  1. to make the Balance Sheet balance
  2. to protect the creditors’ rights
  3. to provide cash for the redemption
  4. to replace the cash used in the redemption

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

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