Category: Accounting

The table shows the budgeted resources required for production and sales, and the available resources.

Market research shows sales demand for 120,000 units.

  resources required per unit  resources available

• material   4.0  460,000 kgs
• direct labour hours   3.0   400,000 hours
• machine hours   0.5  70,000 hours

What is the principal limiting factor in this case?

Select ONE answer:

1. direct labour hours
2. machine hours
3. material
4. sales

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 * 120,000 units = 480,000 kgs > 460,000 kgs
4. Not correct

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

What is a reason for a company issuing bonus shares to its existing shareholders?

Select ONE answer:

1. to capitalise reserves
2. to increase profits available for dividend
3. to raise the market value of shares
4. to raise additional cash

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.

How may a company improve its profit by window dressing?

Select ONE answer:

1. applying an impairment test to goodwill
2. making a provision for redundancy
3. increasing the bad debts provision
4. reducing the rates of depreciation

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

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

Which ratio measures the return on an investment in shares which continue to be held?

Select ONE answer:

1. dividend per share
2. dividend yield
3. earnings per share
4. interest cover

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.

An ordinary share in Alex plc, which is a quoted company has a nominal value of £0.50.

The latest financial statements show earnings per share of £0.10 and a price-earnings ratio of 15.

What is the market value of an ordinary share in Alex plc?

Select ONE answer:

1. £0.50
2. £1.50
3. £2.00
4. £2.50

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 – PE= Share Price / EPS == > 15 = x / £0.10 == > 15 / 0.10 = £1.50
3. Not correct
4. Not correct

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