Day: February 21, 2025

Accounting Multiple Choice Question – 21 February 2025

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

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Alex plc is waiting to start its new factory building programme.

It is likely to start within the next 120 days, but the precise start date and timing of the cash flows are still uncertain.

Alex plc has £250,000 available in cash in anticipation of the investment in the factory being made when the building programme begins.

Which of the following is the least appropriate use of the funds in the interim period?

Select ONE answer:

  1. Investment in equities
  2. Treasury or central government bills
  3. Bank deposits
  4. Local authority deposits

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 == > Short-term cash surpluses will NOT normally be invested in equities owing to the risks associated with achieving a positive return over a short period.
  2. Not correct
  3. Not correct
  4. Not correct

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