The Multiple Choice Questions Blog

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

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Which transaction will cause an increase in shareholders’ capital?

Select ONE answer:

1. disposal of a fixed asset for more than its book value
2. increasing the provision for bad debts
3. receipt of a loan
4. receipt of payment from debtor in 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.

What does this formula show?

(profit available for distribution to ordinary shareholders  /  ordinary dividend payable)

Select ONE answer:

1. dividend cover
2. dividend yield
3. earnings per share
4. price earnings ratio

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 converts some debentures into shares on 1 January 2020.

What is the impact on the following ratios in the 2020 financial statements?

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.

A company has an issued share capital of 8 million shares at £0.50 par value each. 

It pays a dividend of £1.6 million. The dividend yield is currently 12.5 %. 

What is the current market price of each share?

Select ONE answer:

1. £0.50
2. £0.80
3. £1.60
4. £3.20

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 ==> (1,600,000 / 8,000,000) = £0..20 dividend per share / 1.60 ==> 12.5% dividend yield
4. Not correct

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