Month: October 2022

Accounting Multiple Choice Question – 21 October 2022

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

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Below shows information from the Balance Sheets of two companies, X and Y.

  • Ordinary Shares – Company X – £800k & Company Y – £900k
  • 10% Debentures – Company X – £600k & Company Y – £150k
  • Profit and Loss Account – Company X – £300k & Company Y – £650k

Which providers of finance would experience the greatest degree of risk in times of falling profits?

Select ONE answer:

  1. debenture holders of company X
  2. debenture holders of company Y
  3. ordinary shareholders of company X
  4. ordinary shareholders of company Y

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 3

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

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Accounting Multiple Choice Question – 20 October 2022

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

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Which ‘window dressing’ technique (if permitted) could be used to improve a company’s earnings per share figure?

Select ONE answer:

  1. overstating the value of buildings by excessive revaluations
  2. incorrectly classifying short term loans as long term loans
  3. showing ‘cash equivalents’ as ‘cash’
  4. failing to account for a material bad debt provision

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 4

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

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

Accounting Multiple Choice Question – 19 October 2022

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

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A company acquires the net assets of a business for which it issues £400,000 of ordinary shares.

The business acquired has an overdraft of £100,000 but no long term debt.

What is the impact on the gearing and the net cash position of the company?

Select ONE answer:

  1. Gearing – Decreases / Net Cash – Increases
  2. Gearing – Decreases / Net Cash – Decreases
  3. Gearing – Increases / Net Cash – Increases
  4. Gearing – Increases / Net Cash – Decreases

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.

Accounting Multiple Choice Question – 18 October 2022

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

Photo by Nataliya Vaitkevich on Pexels.com

Which event reduces the interest cover?

Select ONE answer:

  1. a decrease in dividend
  2. a decrease in interest rates
  3. an increase in dividend
  4. an increase in interest rates

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 4

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

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

Accounting Multiple Choice Question – 17 October 2022

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

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The following information relates to a company.

  • profit after tax £240,000
  • dividend cover – 3 times
  • number of ordinary shares of £1 – 250,000
  • market price of one ordinary share – £4

What is the dividend yield?

Select ONE answer:

  1. 8%
  2. 24%
  3. 26%
  4. 32%

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 – £240,000 / 3 = £80,000 / 250,000 = = > Dividend per share = £0.32 = = > / £4 = 8%
  2. Not correct
  3. Not correct
  4. Not correct

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