Month: December 2022

A company has issued non-cumulative preference shares and ordinary shares.

Which statement is correct?

Select ONE answer:

1. If no preference dividend is paid, it is carried forward to a future year.
2. Preference shareholders always get a dividend.
3. Preference shareholders and ordinary shareholders always get a dividend.
4. Preference shareholders may get a dividend.

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

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

At the beginning of the year a business has a provision for doubtful debts of £2,600.

At the year end the provision is to be 5% of trade receivables.

The balance on the sales ledger control account at the year end is £69,200, before writing off a bad debt of £480.

The business operates a separate bad debts account.

What is the entry in the Profit and Loss Account for the “provision for doubtful debts” T-account?

Select ONE answer:

1. £836 debit
2. £860 debit
3. £836 credit
4. £860 credit

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 = (£69,200 – £480) * 0.05 – £2,600 ==> £836 debit to the P&L
2. Not correct
3. Not correct
4. Not correct

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

EMS Ltd has a first profit for the year of £20,000 in its draft financial statements.

Capital receipts of £5,000 have been treated as revenue receipts.

Capital expenditure of £4,000 has been treated as revenue expenditure.

What is the correct profit for the year figure?

Select ONE answer:

1. £11,000
2. £19,000
3. £21,000
4. £29,000

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 = £20K – £5K + £4K
3. Not correct
4. Not correct

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