Accounting Multiple Choice Question – 27 January 2023

The table shows Alex plc’s Statement Of Financial Position.

Non-current assets – £60,000
Current assets – £10,000
Total – £70,000

Issued share capital £100,000
Profit & Loss Account (£30 000)
Total – £70,000

Alex plc has decided to do the following:

• The issued shares of £0.50 each are to be reduced to shares of £0.25 each.
• The non-current assets are to be revalued at £40,000.
• The Profit and Loss balance is to be written off.

What will be the total of non-current and current assets?

Select ONE answer:

1. £20,000
2. £50 000
3. £70,000
4. £80,000

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 = = > Dr P&L £20K Cr NCA £20k & then Dr Issued Share Capital £50k Cr P&L £50k
3. Not correct
4. Not correct

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