Accounting Multiple Choice Question – 4 April 2021

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

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A company’s Balance Sheet shows below the following information: 

The preference shares are to be redeemed at par with no new issue of shares.

The company wishes to maintain maximum distributable profits. 

What will the balance on the Profit and Loss Account be after redemption of the shares?

Select ONE answer:

  1. £100,000
  2. £200,000
  3. £300,000
  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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct

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