Author: stuart001uk2014

When a company redeems shares, it may create a capital redemption reserve.

Why does it create this reserve?

Select ONE answer:

1. to make the Balance Sheet balance
2. to protect the creditors’ rights
3. to provide cash for the redemption
4. to replace the cash used in the redemption

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 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

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

The table below shows an extract taken from the final accounts of a limited company.

The only acquisitions and disposals were those stated above.

What will be the net cash outflow as a result of these transactions? 

Select ONE answer:

1. £103,500
2. £108,500
3. £110,000
4. £115,000

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 2

1. Not correct
2. Correct – £100,000 + £10,000 – £1,500
3. Not correct
4. Not correct

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

What is not included in cash flow statements?

Select ONE answer:

1. capital commitments
2. foreign currency deposits
3. liquid investments
4. taxation

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 
2. Not correct
3. Not correct
4. Not correct

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

When a company calculates the net present value of proposed capital expenditure, which rate does it use to discount annual income and expenditure?

Select ONE answer:

1. cost to the company of providing the initial outlay
2. current rate of inflation
3. rate of interest payable on a bank overdraft
4. rate which will give the highest net present value

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 
2. Not correct
3. Not correct
4. Not correct

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

Which item should be treated as capital expenditure?

Select ONE answer:

1. the addition of a back-up system on an existing computer at a cost of £900
2. costs incurred in repairing a car when the costs cannot be recovered from the insurance company
3. rent paid on a factory, whilst the company negotiated the purchase of that same factory
4. the replacement of a wooden fence with a new fence

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 
2. Not correct
3. Not correct
4. Not correct

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