Category: Accounting

How may a company ‘window dress’ its financial statements?

What will achieve this?

Select ONE answer:

1. amortising Goodwill as soon as it arises
2. failure to write down freehold property following a revaluation shortly after the Balance Sheet date
3. omitting to write down stock which has been stolen after the Balance Sheet date
4. writing off debts before they have become bad

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.

A company wishes to reduce its gearing.

What will achieve this?

Select ONE answer:

1. a bonus issue of ordinary shares
2. an issue of debentures
3. an issue of convertible loan stock
4. a rights issue of ordinary shares

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.

When deciding whether to transfer money from an interest bearing bank account to an investment in ordinary shares, which of the following ratios should be considered?

Select ONE answer:

1. dividend yield
2. earnings per share
3. interest cover
4. return on shareholders’ funds

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.

Which of the following correctly shows the effect of a company revaluing upwards its fixed assets?

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 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.

An accounting standard (SSAP 25 ‘Segmental Reporting’) requires companies to disclose certain information in published accounts.

What does this standard require to be disclosed?

Select ONE answer:

1. amounts of annual depreciation
2. earnings per share
3. stock valuation methods
4. turnover in different classes of business

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.