Accounting Multiple Choice Question – 4 April 2021

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

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