Accounting Multiple Choice Question – 31 July 2022

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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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor View all posts by stuart001uk2014