Accounting Multiple Choice Question – 3 February 2023

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

Photo by Pixabay on Pexels.com

A company has issued a debenture loan carrying interest at the rate of 8 % payable every 31 December.

Also, each 31 December £20 000 of the debenture is redeemed.

At 31 December 2015 the total debenture loan outstanding was £100 000.

Which amounts should be disclosed in the company’s published Statement Of Financial Position at 31 December 2016?

Select ONE answer:

  1. accrued interest £NIL / current liabilities £20,000 / long term loan £60,000
  2. accrued interest £NIL / current liabilities £20,000 / long term loan £80,000
  3. accrued interest £6,400 / current liabilities £NIL / long term loan £80,000
  4. accrued interest £8,000 / current liabilities £20,000 / long term loan £80,000

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 1

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

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

Accounting Multiple Choice Question – 2 February 2023

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

Photo by Olya Kobruseva on Pexels.com

FRS 18 is an accounting statement that describes certain accounting policies including

  1. accruals
  2. consistency
  3. going concern
  4. prudence.

Which two accounting policies must be applied in the preparation of published accounts?

Select ONE answer:

  1. 1 and 2
  2. 1 and 3
  3. 2 and 3
  4. 2 and 4

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

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

Accounting Multiple Choice Question – 1 February 2023

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

Photo by Nataliya Vaitkevich on Pexels.com

Alex Ltd acquires the whole of the net assets of Lucy and Co., an unincorporated business, for £450 000 in cash and £200 000 in shares.

The book values and fair values of Lucy and Co. at the time of acquisition are shown.

   net book value (£)  fair value (£)

fixed assets   235 000   315 000

current assets   465 000    290 000 

current liabilities   (197 000)     (230 000) 

   503 000   375 000

What is the value of the goodwill arising on acquisition?

Select ONE answer:

  1. £75,000
  2. £128,000
  3. £147,000
  4. £275,000

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct == > £450K + £200k = £650k – £375k == > £275k

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

Accounting Multiple Choice Question – 30 January 2023

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

Photo by Olya Kobruseva on Pexels.com

A limited company purchases a partnership.

It issues to the partners 20 % debentures and pays them cash in full settlement of the purchase price.

What is true?

Select ONE answer:

  1. The company’s gearing is reduced.
  2. The company intended to expand its business.
  3. The company’s reserves are reduced.
  4. The partners now own some of the equity in 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 2

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

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

Accounting Multiple Choice Question – 29 January 2023

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

Photo by Nataliya Vaitkevich on Pexels.com

Alex plc converts £2,000,000 debenture stock into £0.50 ordinary shares.

The conversion rate is 40 ordinary shares per £100 debenture stock.

What amount is credited to the Share Premium account?

Select ONE answer:

  1. £800,000
  2. £1,000,000
  3. £1,200,000
  4. £1,600,000

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct == > £2,000,000 / £100 = 20,000 units * 40 = 800,000 ordinary shares / 0.5 = £1,600,000

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

%d bloggers like this: