Accounting Multiple Choice Question – 18 July 2023

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

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Contribution by product is an important aspect of costing.

How is it calculated?

Select ONE answer:

  1. income from sales plus fixed costs
  2. income from sales plus variable costs
  3. income from sales minus fixed costs
  4. income from sales minus variable costs

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 – 17 July 2023

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

Photo by Nataliya Vaitkevich on Pexels.com

Alex plc budgets to produce 110,000 units.

Market research shows that the demand for the product will be for 90,000 units.

The table shows the resources required for the budgeted production, and the available resources for Alex plc.

  • resources required per unit – material 3 kilos + direct labour hours 2.5 + machine hours 0.5
  • resources available – 335,000 kilos + 300,000 labour hours + 110,000 machine hours

What is the principal limiting factor in this case?

Select ONE answer:

  1. direct labour
  2. machine hours
  3. material
  4. sales

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

Accounting Multiple Choice Question – 16 July 2023

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

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Alex plc revalues its buildings upwards.

What is the impact on the following ratios?

Select ONE answer:

  1. Gearing – Decrease / Return on capital employed – Decrease
  2. Gearing – Decrease / Return on capital employed – Increase
  3. Gearing – Increase / Return on capital employed – Decrease
  4. Gearing – Increase / Return on capital employed – 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 1

  1. Correct
  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 July 2023

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

Photo by Nataliya Vaitkevich on Pexels.com

What is a reason for a company issuing bonus shares? 

Select ONE answer:

  1. to increase liquidity
  2. to increase profitability
  3. to reduce gearing
  4. to reduce capital reserves

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 July 2023

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

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Alex ltd is a company that has the following capital structure:

  • £1 ordinary shares – £500k
  • Share premium account – £300k
  • Retained Earnings – £200k
  • Total Capital & Reserves- £1M

The following transactions will take place during the year in the following order:

  • a bonus issue of 1 share for every 5 held;
  • a rights issue of 500 000 shares of £1 each at a premium of £0.50;
  • an issue of debentures of £250,000.

What will be the total of the share capital and reserves of Alex Ltd after the completion of these transactions?

Select ONE answer:

  1. £1.5M
  2. £1.75M
  3. £1.85M
  4. £2M

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– 1. Dr SPA £100k Cr OS £100k = TCR Still £1M; 2. Dr Cash £750k Cr SPA £250k OS £500k = TCR now £1.75M; 3. Dr Cash £250k Cr NCL £250k = TCE is £2M but TCR is still £1.75M
  3. Not correct
  4. Not correct

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