Category: Business Studies

Accounting Multiple Choice Question – 10 February 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

apple devices books business coffee
Photo by Serpstat on Pexels.com

Alex plc wants to be listed on the London Stock Exchange.

Ken, their adviser has stated that the following are methods by which a company can obtain a new London Stock Exchange quotation for its shares:

Method 1 Offer for sale
Method 2 Placing
Method 3 Rights issue
Method 4 Offer for subscription

Which of these methods are actually available to Alex plc?

Select ONE answer:

  1. Methods 1, 2 and 3 only
  2. Methods 2, 3 and 4 only
  3. Methods 1, 2 and 4 only
  4. Methods 1, 3 and 4 only

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 == > A rights issue is the only one of these methods which cannot be used to obtain a new stock exchange listing.
  4. Not correct

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

Accounting Multiple Choice Question – 9 February 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Which of the following forms of new share issues would normally be underwritten?

Select ONE answer:

  1. Introduction
  2. Offer for sale by tender
  3. Placing
  4. Rights issue

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 == > No new shares are issued in an introduction and so there is no need to underwrite. An offer for sale by tender would not normally need underwriting since the issue price reflects the value of the shares as perceived by the market. Underwriting would only be necessary if there is a risk that there will be under-subscription even at the minimum price. It is unnecessary to underwrite a placing since a purchaser for the shares is arranged in the issue process. Although a rights issue should not need underwriting in theory, since all the shares are being offered to existing shareholders, in practice it will usually be underwritten. This is to ensure that sufficient funds are raised from the issue, even if the rights are not fully exercised.

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

Accounting Multiple Choice Question – 8 February 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

apple devices books business coffee
Photo by Serpstat on Pexels.com

In which of the following projects would a venture capital organisation be least likely to invest?

Select ONE answer:

  1. A business start-up
  2. A management buyout
  3. Renovation of a production facility
  4. Replacement of an existing production line with a process using a new technology

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 == > Venture capital is generally most appropriate for new investments with above average risk. Renovation of an existing facility is a part of the ongoing activity of the business and is unlikely to have much impact on the overall level of returns. It is therefore unlikely to be appropriate for a venture capital investment.
  4. Not correct

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

Accounting Multiple Choice Question – 7 February 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

Which of the following is an example of an institutional investor?

Select ONE answer:

  1. The Bank of England
  2. The Financial Reporting Council
  3. The Financial Conduct Authority
  4. A unit trust

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 == > The Bank of England is the UK central bank, and the Financial Reporting Council and Financial Conduct Authority are regulators. A unit trust is an institutional investor, along with for example pension funds and insurance companies.

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

Accounting Multiple Choice Question – 6 February 2025

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Photo by Nataliya Vaitkevich on Pexels.com

‘A short-term wholesale market for securities maturing in one year, such as certificates of deposit, treasury bills and commercial paper.’

What type of market from the list below does the definition above relate to?

Select ONE answer:

  1. Capital market
  2. The London Stock Exchange
  3. AIM (Alternative Investment Market)
  4. Money market

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 == > Money market. AIM and the London Stock Exchange are both examples of capital markets.

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