Category: Accounting

The following information relates to a company.

• profit after tax £240,000
• dividend cover – 3 times
• number of ordinary shares of £1 – 250,000
• market price of one ordinary share – £4

What is the dividend yield?

Select ONE answer:

1. 8%
2. 24%
3. 26%
4. 32%

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 – £240,000 / 3 = £80,000 / 250,000 = = > Dividend per share = £0.32 = = > / £4 = 8%
2. Not correct
3. Not correct
4. Not correct

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

The following data is available for a company:

• £1 ordinary shares – 100M
• £1 preference shares – 50M
• net profit (before dividends) – £55M
• ordinary dividend – £15M
• preference dividend – £5M

The market price of one ordinary share is £10.

What is the price / earnings (P/E) ratio?

Select ONE answer:

1. 18.2
2. 20
3. 25
4. 28.6

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 = = > EPS is £55M – £5M = £50M / 100M = 50p per share = = > £10 / £0.5 = 20 PE
3. Not correct
4. Not correct

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

Which of these items must be disclosed, according to company law, in the notes to a Company’s published Profit and Loss Account?

Select ONE answer:

1. a review of the company’s activities for the year
2. the remuneration of the auditors
3. exceptional items
4. details of research and development activities undertaken

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.

Which item is not required in the Report of Directors of a limited company?

Select ONE answer:

1. details of export sales
2. future developments for the business
3. the names of the directors
4. the proposed dividend details

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.

Lucy Ltd has the following balance sheet summary:

• Fixed assets at net book value – £120,000
• Net current assets – £30,000
• Total Assets – £150,000
• Financed by capital and reserves – £150,000

The fixed assets are then revalued at £180,000, and the net current assets at £20,000. The business is finally acquired for £225,000.

What is the payment for Goodwill?

Select ONE answer:

1. £25,000
2. £45,000
3. £75,000
4. £105,000

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 = £225,000 – £180,000 – £20,000 = – > £25,000
2. Not correct
3. Not correct
4. Not correct

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