Month: March 2022

A company provides the following information for the year ended 31 May 2021.

• total purchases – £175,000
• cash purchases – £35,000
• inventory 1 June 2020 – £12,000
• inventory 31 May 2021 – £15 000

What is the rate of inventory turnover (rounded to the nearest whole number)?

Select ONE answer:

1. 11 times
2. 12 times
3. 13 times
4. 16 times

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 – COS / Average Inventories ==> (£12,000 + £175,000 – £15,000) / ((£12,000 + £15,000) / 2)
4. Not correct

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An investor is looking at the financial statements of a company in which he may decide to invest.

Which item helps him to rely on the financial statements?

Select ONE answer:

1. consistency of accounting policies from one period to the next
2. estimation of accounting provisions relying on the opinion of managers
3. inflation in the currency in which the financial statements are prepared
4. lapse of time since the date of the statement of financial position and when he reads the documents

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.

The table shows an extract from the financial statements of a limited company.

• ordinary share capital (£1 shares) – £500,000
• share premium – £150,000
• revaluation reserve – £200,000
• retained earnings – £250,000

What is the maximum dividend per share that can be paid?

Select ONE answer:

1. £0.50
2. £0.80
3. £0.90
4. £1.20

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 ==> £250k / 500,000 = £0.50 per share
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 statement of financial position showed the total equity of £300,000 on 1 July 2020.

The following took place during the year ended 30 June 2021.

• Profit for the year was £77,500.
• An interim dividend of £9,000 was paid.
• A final dividend of £16,000 was proposed.

What was the total equity at 30 June 2021?

Select ONE answer:

1. £344,500
2. £352,500
3. £368,500
4. £376,500

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 – £300,000 + £77,500 – £9,000
4. Not correct

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

Which items are capital reserves?

1 debentures
2 retained earnings
3 revaluation reserve
4 share premium

Select ONE answer:

1. 1 and 2
2. 1 only
3. 3 and 4
4. 4 only

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.