Month: November 2021

A business calculated that its quick (acid test) ratio is lower this year than last year.

What caused the reduction in the ratio?

Select ONE answer:

1. an increase in creditors
2. an increase in stock
3. an increase in debtors
4. an increase in bank

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.

A company’s Balance Sheet shows the following balances:

• ordinary shares of £1 each  —  £100 000
• share premium  —  £10 000
• Profit and Loss    —  £48 000
• bank balance  —  £50 000

A 1 for 4 bonus issue takes place, leaving the reserves in the most useful form. What are the new account balances?

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 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.

What will result in an increase in cash funds to a business?

Select ONE answer:

1. bonus issue of shares
2. increase in authorised share capital
3. revaluation of fixed assets
4. rights issue of shares

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.

A company’s Balance Sheet includes the following extract:

What is the maximum number of bonus shares that may legally be issued?

Select ONE answer:

1. 1,400,000
2. 2,400,000
3. 3,000,000
4. 3,400,000

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.

You are given the following information on 31 December 2020 by Alex, a sole trader.

Unsold stock on 31 December 2020 was valued at £1,000 more than on 1 January 2020.

What is the cost of sales?

Select ONE answer:

1. £86 000
2. £87 000
3. £89 000
4. £97 000

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 2

1. Not correct ==> £95K – £1k – £3k – £5k
2. Correct ==> £95K – £1k – £2k – £5k
3. Not correct ==> £95K + £1k – £2k – £5k
4. Not correct

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