The Multiple Choice Questions Blog

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

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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

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Which changes does a cash flow statement show?

Select ONE answer:

1. bank and cash balances
2. funds flow
3. gearing
4. net book value of investments

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

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A company has issued 8% debentures redeemable 31 December 2020.

Under which heading should the company show the debentures in its Balance Sheet at 31 December 2021?

Select ONE answer:

1. authorised capital
2. creditors : amounts falling due after more than one year
3. creditors : amounts falling due within one year
4. issued share capital

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

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

A business was purchased by a company for $1.5 million. The table shows an extract from the 

Balance Sheet of the business purchased. 

1. fixed assets – £400,000
2. net current assets – £120,000
3. long-term loan – £200,000

If these values were agreed by the purchasing company, how much was paid for Goodwill? 

Select ONE answer:

1. £520,000
2. £780,000
3. £980,000
4. £1,180,000

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 – £400K + £120K – £200K = £320k – £1,500k ===> £1,180k

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