Category: Accounting

A company manufactures three products for which the following details (per unit) are available. 

     product X £    product Y £   product Z £

Contribution per unit                160                   175               190

Fixed Overhead per unit           125                   130               160      

Labour hours per unit               1                       1.25               0.75

The company is experiencing a shortage of labour.

In which order should the products be ranked to maximise profit?

Select ONE answer:

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

• Not correct
• Not correct
• Correct
• Not correct

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

On the company’s accounting date, the accountant writes cheques to pay creditors and records them in the books immediately.

The cheques are then deliberately retained by the accountant for two weeks.

What effect does this have on the Balance Sheet?

Select ONE answer:

1. the accounts show a higher figure for cash
2. the accounts show a lower figure for creditors
3. to improve the company’s cash flow
4. to improve the company’s gearing

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 of the following are NOT capital instruments? 

Select ONE answer:

1. debentures
2. share options
3. shares
4. title deeds to freehold property

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 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.

A company redeems its preference shares and makes a bonus issue of one ordinary share for every four held. 

How will these transactions affect the balance sheet?

Select ONE answer:

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

• Not correct
• Correct
• Not correct
• Not correct

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