Accounting Multiple Choice Question – 26 July 2022

A limited company has an authorised share capital of £750 000 and an issued share capital of £450 000 in £1.00 ordinary shares.

It makes a 1 for 3 rights issue of shares at £2.00 per share which is fully taken up.

What is the balance on the share capital account following this transaction?

Select ONE answer:

1. £600 000
2. £700 000
3. £750 000
4. £900 000

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 – £40k / 3 = £150k ==> £450k + £150k = £600k
2. Not correct
3. Not correct
4. Not correct

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