The Multiple Choice Questions Blog

The following information is available for a business.

What is the creditors’ payment period?

Select ONE answer:

1. 40 days
2. 43 days
3. 47 days
4. 54 days

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 – (186 / 24) * 365
4. Not correct

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

The following items are included in the Balance Sheet of a business.

What is the quick (acid test) ratio?

Select ONE answer:

1. 1.1 : 1
2. 1.2 : 1
3. 1.7 : 1
4. 2.4 : 1

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 — (£126 + £21) / £87
4. Not correct

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

A business sells stock to a credit customer at a selling price greater than cost.

What effect will this transaction have on the current and quick (acid test) ratios?

Select ONE answer:

1. Both ratios will be unchanged.
2. Both ratios will increase.
3. The current ratio will increase while the quick ratio will not change.
4. The current ratio will not change while the quick ratio will increase.

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

1. Not correct
2. Correct
3. Not correct
4. Not correct

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

When a shareholder sells some shares for less than he paid for them, what will happen to the share capital of the company?

Select ONE answer:

1. It will fall by the nominal value of the shares sold.
2. It will fall by the sales proceeds of the shares sold.
3. It will increase by the amount received from the sale of the shares.
4. It will remain the same as before.

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

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

A company is financed by: 

1. 10,000 £1 ordinary shares
2. £5,000 10% loan

Net profit before interest and taxation is £2,500. 

Tax payable is £400. 

What is the maximum dividend per share payable from this year’s profits? 

Select ONE answer:

1. £0.16
2. £0.20
3. £0.21
4. £0.25

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 — (£2,500 – (£5,000 *0.1) – £400) / 10,000 = £0.16
2. Not correct
3. Not correct
4. Not correct

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