Month: August 2021

What right does convertible loan stock give the investor?

Select ONE answer:

1. Current asset investments are included under ‘management of liquid reso acquire ordinary shares in the company at a given price in addition to the loan stock
2. to obtain higher rates of interest on future convertible loan stock
3. to convert the loan into ordinary shares issued at a discount
4. to convert the loan into ordinary shares at a given future date and at a specified price

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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Lucy Limited’s balance sheet at 31 December is as follows:

The share premium account arose on the issue of the ordinary shares.

The preference shares are now redeemed at a premium of 20%. 

What will be the balance on the Capital Redemption Reserve after this transaction?

Select ONE answer:

1. NIL
2. £1,900
3. £2,000
4. £2,400

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

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

The following information has been extracted from the final accounts of Company A for the last two years.

What will be the amount appearing on the cash flow statement for year 2 with respect to taxation paid? 

Select ONE answer:

1. £48,000
2. £50,000
3. £52,000
4. £55,000

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 1

1. Correct – £50,000 + £55,000 – £57,000 ==> £48,000
2. Not correct
3. Not correct
4. Not correct

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

The following are extracts from the financial statements of a company for the two years ended 31 December 2019 and 2020.

What is the operating cash flow for the year ended 31 December 2020?

Select ONE answer:

1. £42,350
2. £43,050
3. £51,950
4. £61,650 

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 ==> £47,200 + £9,600 – (£32,990 – £30,000) – (£16,200 – £14,000) + (£10,340 – £10,000)
4. Not correct

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

Which statement regarding the content of headings on a cash flow statement is correct? 

Select ONE answer:

1. Current asset investments are included under ‘management of liquid resources’.
2. ‘Financing’ includes interest payments to lenders.
3. Ordinary share dividends paid are included under ‘returns on investment and servicing finance’.
4. Proceeds from the sale of fixed assets are included under ‘financing’. 

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 1

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

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