Accounting Multiple Choice Question – 2 September 2023

Alex plc’s statement of financial position at 31 December 2022 included the following non-current liabilities:

• loan (repayable on 30 June 2024) – £120,000
• 8 % debentures (2022-2025) – £70,000

The company intends to redeem half the debentures on 31 December 2024 and the remainder on 1 June 2025.

How should these liabilities be shown in the balance sheet at 31 December 2023?

Select ONE answer:

1. current liabilities: debentures £35,000 and non-current liabilities: debentures £35,000 & loan £120,000
2. current liabilities: debentures £70,000 and non-current liabilities: loan £120,000
3. current liabilities: debentures £35,000 & loan £120,000 and non-current liabilities: debentures £35,000
4. current liabilities: debentures £35,000 and non-current liabilities: debentures £35,000 & loan £120,000

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
4. Not correct

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