Accounting Multiple Choice Question – 13 August 2022

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

The Balance Sheet of a company includes the following.

  • Ordinary share capital – £600k
  • Share Premium account – £200k
  • Retained profit – £100k
  • Total Equity – £900k
  • 10% Debenture stock 2003/2005 – £120k

The company has decided to redeem all its debenture stock at a premium of 10%.

Which of the following is true?

Select ONE answer:

  1. The company must create a Capital Redemption Reserve.
  2. The debenture stock must have been issued at a premium.
  3. The premium may be debited to the Share Premium account.
  4. The premium must be debited in the Profit and Loss Account.

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
  4. Not correct

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

Accounting Multiple Choice Question – 11 August 2022

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

A business redeems debentures by cash payment.

What is the effect of this payment on equity, long-term liabilities and working capital?

Select ONE answer:

  1. equity decrease & long term liabilities decrease & working capital decrease
  2. equity decrease & long term liabilities decrease & working capital no change
  3. equity no change & long term liabilities decrease & working capital decrease
  4. equity no change & long term liabilities increase & working capital decrease

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
  4. Not correct

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

Accounting Multiple Choice Question – 10 August 2022

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

Which statement is correct?

Select ONE answer:

  1. A capital redemption reserve may be used to finance the redemption of redeemable preference shares.
  2. All of the issued share capital may be redeemed.
  3. Partly paid redeemable preference shares may be redeemed.
  4. The company’s Articles of Association must authorise the issue of redeemable 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

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

Accounting Multiple Choice Question – 9 August 2022

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

The following items appear in a company’s Profit and Loss Account.

  • profit, after charging or crediting the following items – £16 800
  • annual depreciation charge – £6 000
  • loss on sale of tangible assets – £1 800
  • interest paid – £7 500
  • profit on sale of tangible assets – £1 100

What is the cash flow from operating activities?

Select ONE answer:

  1. £15 700
  2. £29 600
  3. £31 000
  4. £33 200

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 – £16,800 + £6 ,000 + £7,500 + £1,800 – £1,100
  4. Not correct

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

Accounting Multiple Choice Question – 5 August 2022

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

The budget for a product is shown.

  • unit sales 620 000
  • selling price per unit – £31
  • variable cost per unit – £16
  • contribution per unit – £15
  • fixed costs £7 500 000

If the fixed costs rise to £7 800 000, the selling price is reduced to £29 per unit, and the variable cost remains unchanged at £16 per unit, the sales are likely to reach 660 000 units.

By what percentage will the revised break-even point increase?

Select ONE answer:

  1. 3.8%
  2. 4.0%
  3. 16.7%
  4. 20.0%

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 ==> old = £7,500,000 / £15 = 500,000 units BEP ==> new = £7,800,000 / £13 new contribution per unit = 600,000 units which is a 20% increase.

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

%d bloggers like this: