Accounting Multiple Choice Question – 17 January 2021

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

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Which of the following will increase gearing?

Select ONE answer:

  1. conversion of loan stock into shares
  2. transfer of a general reserve to the Profit and Loss Account
  3. upward revaluation of freehold premises
  4. writing off Goodwill

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

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Accounting Multiple Choice Question – 16 January 2021

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

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The issued share capital of PQR Ltd. is:

  1. 500,000 6 % preference shares of £1.00 each fully paid
  2. 3,000,000 ordinary shares of £0.50 each fully paid


The company also has a long-term liability consisting of £200,000 of 7.5 % debentures, which were issued some years ago.

The company’s operating profit is £285,000.

What will be the dividend per ordinary share?

Select ONE answer:

  1. £0.04
  2. £0.0425
  3. £0.045
  4. £0.475

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 – (£500k * 0.06) + (£200k * 0.075) = £45k ===> £285 – £45k = £240k / 6,000k shares ===> £0.04
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 15 January 2021

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

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Which business should have the highest fixed asset turnover?

Select ONE answer:

  1. a car manufacturer
  2. a hotel
  3. an oil company
  4. a retail department store

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 – 14 January 2021

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

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In its accounts, a company makes a transfer from profits to general reserve.

How will this be shown in the cash flow statement?

Select ONE answer:

  1. as an adjustment not involving the movement of cash
  2. as a source of cash
  3. as a use of cash
  4. not appear at all

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 – 13 January 2021

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

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Which material event, occurring shortly after the year end, should be disclosed only as a note to the accounts?

Select ONE answer:

  1. discovery of a payroll computer fraud
  2. insolvency of a major debtor
  3. loss of stock due to flood damage
  4. permanent reduction in value of 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 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.