Day: February 10, 2023

Accounting Multiple Choice Question – 10 February 2023

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

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The information in the table relates to Alex plc:

  • share premium account – £240,000
  • 10 % debentures – £100,000
  • retained profit – £180,000

The company redeems the debentures at a premium of 10 %.

What will be the effect on Alex’s Statement Of Financial Position?

Select ONE answer:

  1. retained profit £70,000 / share premium account £240,000
  2. retained profit £80,000 / share premium account £230,000
  3. retained profit £170,000 / share premium account £240,000
  4. retained profit £180,000 / share premium account £230,000

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct == > £240,000 – £100,000 * 0.1

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