Accounting Multiple Choice Question – 19 August 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Accounting
apple devices books business coffee
Photo by Serpstat on Pexels.com

A company has issued £1 000 000 of 8 % convertible loan stock, which the holder can convert in November 2007 into ordinary shares at a rate of 1 share for each £2.00 of loan stock held.

What is the correct presentation in the final accounts for the year ended 31 December 2004?

Select ONE answer:

  1. Balance Sheet – Long Term loan £1 000 000 & Profit and Loss – Dividend £80 000
  2. Balance Sheet – Long Term loan £1 000 000 & Profit and Loss – Loan Interest £80 000
  3. Balance Sheet – Ordinary Share Capital £500 000 & Profit and Loss – Dividend £40 000
  4. Balance Sheet – Ordinary Share Capital £500 000 & Profit and Loss – Loan Interest £40 000

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 2

  1. Not correct
  2. Correct
  3. Not correct
  4. Not correct

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

Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: