Accounting Multiple Choice Question – 8 July 2022

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 has issued shares at a premium.

For what purpose from the options below can the balance on the share premium account be used by a business?

Select ONE answer:

  1. to provide for the premium on the redemption of shares which were issued at par
  2. to provide for the discount on a new issue of shares
  3. to write off the preliminary expenses incurred in forming the company
  4. to write off a loss on the revaluation of fixed assets

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

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