Month: March 2023

Which item need NOT be disclosed in a set of company accounts?

Select ONE answer:

1. accounting policies
2. audit fees
3. directors’ remuneration
4. vehicle running costs

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.

Which will show the lowest figure in the statement of financial performance of a company?

Select ONE answer:

1. authorised share capital
2. called-up share capital
3. issued share capital
4. paid up share capital

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.

What is required to be disclosed in the directors’ report?

Select ONE answer:

1. accounting policies
2. directors’ remuneration
3. earnings per share
4. the main activity of the company

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.

Alex agrees to sell his business.

The value of the business being sold is shown.

• goodwill £32k
• fixed assets £100k
• current assets £60k
• current liabilities £12k

The purchase consideration is shares with a nominal value of £1, to be issued at a premium of £0.20.

How many shares will Alex receive?

Select ONE answer:

1. 150,000
2. 160,000
3. 170,000
4. 180,000

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 3

1. Not correct
2. Not correct
3. Correct – £32k + £100k + £60k + £12k = £204k / £1.2 per share = 170,000 shares
4. Not correct

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

Alex plc’s SOFP showed the following:

• net assets – £10M
• £1 ordinary shares – £5M
• Retained earnings – £5M

The company intends to purchase one million of its own shares at a price of £1.50 per share.

What is the value of the resulting balance on retained earnings AFTER the purchase?

Select ONE answer:

1. £3.5 million
2. £4.0 million
3. £4.5 million
4. £5.0 million

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 – 1M * £1.5 each = £1.5M == > Dr Shares £1M Dr Retained Earnings £0.5M Cr Cash £1.5M
4. Not correct

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