Accounting Multiple Choice Question – 31 July 2022

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Given below are extracts from a company’s Profit and Loss Account and Statement Of Financial Position for last year.

                                                                    Profit and Loss Account £000 
  • profit before interest and tax – £200k
  • interest paid – £(20)k
  • net profit before taxation – £180k
  • taxation – £(60)k
  • dividends – £(10)k
  • retained profit for year – £110k
                                                                    Statement Of Financial Position £000 
  • Total assets – £1 000k
  • long term loan – (£100)k
  • Net current assets – £900k
  • share capital and reserves – £900k

What is the return on total capital employed?

Select ONE answer:

  1. 18%
  2. 20%
  3. 22.2%
  4. 25.7%

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
  2. Correct ==> Profit before interest and tax / Capital Employed (Share capital & reserves + NCL) = £200k / £1,000k = 20%
  3. Not correct
  4. Not correct

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