Accounting Multiple Choice Question – 23 August 2022

A company has ordinary share capital of £5 million in shares of £0.50 and has the following results (£000s):

• operating profit before depreciation – 12 000
• depreciation – 1 500
• interest payable – 2 000
• preference dividends paid – 500

What is the company’s earnings per share for the period?

Select ONE answer:

1. £0.80
2. £0.85
3. £1.00
4. £1.70

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 – £12,000 – (1,500 + 2,000 + 500) = 8,000 / (5,000,000 * 2) = 80p per share
2. Not correct
3. Not correct
4. Not correct

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