Day: July 6, 2023

Accounting Multiple Choice Question – 6 July 2023

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

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Alex Ltd acquires the assets and assumes the liabilities of Lucy Ltd which have open market values of:

  • assets – £120k
  • liabilities – £15k

Acorn is to issue a debenture of £50k and 10,000 £1 ordinary shares for the balance of consideration to buy Lucy Ltd.

What will be the credit to the share premium account in the books of Alex Ltd?

Select ONE answer:

  1. £45k
  2. £55k
  3. £60k
  4. £95k

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 – £120k – £15k = £105k – £50k & 10k = £45k
  2. Not correct
  3. Not correct
  4. Not correct

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