Category: Accounting

The break-even chart for a product is shown below.

What does XY represent?

Select ONE answer:

1. 1.fixed costs
2. 2.gross profit
3. 3.net loss
4. 4.variable costs

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

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A company has the following information in £00ks from its balance sheet:

• taxation due – 40
• accounts receivable – 150
• bank overdraft – 90
• Inventory – 110
• proposed dividend – 70
• accounts payable – 80

What is the liquidity (acid test or quick) or Liquid Capital ratio?

Select ONE answer:

1. 0.54:1
2. 0.88:1
3. 0.93:1
4. 1.85:1

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 – 150 / (40 + 90 + 70 + 80)
2. Not correct
3. Not correct
4. Not correct

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

A business turns over its inventory 5 times a year.

Average inventory is £54,000 and sales are made at a mark-up of one third.

How much are the sales in £s?

Select ONE answer:

1. 240,000
2. 270,000
3. 320,000
4. 360,000

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 – £54k * 5 = £270k * 1.333333333333333 = £360k

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What does the ratio of current assets / current liabilities show?

Select ONE answer:

1. asset usage
2. Liquidity
3. profitability
4. return on capital employed

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.

Alex ltd’s capital structure is shown below:

• 700 000 ordinary shares of £0.25 each – £175,000
• 8 % debenture – £160,000

During the year the company made profits before interest of £105k.

The directors wish to distribute as much of the profits as possible by way of dividend.

What is the dividend per share?

Select ONE answer:

1. £0.1317
2. £0.15
3. £0.5268
4. £0.60

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 – £105,000 – (£160,000 * 0.08) then divided by 700,000 shares = 0.1317
2. Not correct
3. Not correct
4. Not correct

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