Accounting Multiple Choice Question – 18 August 2022

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

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Which item is required in the directors’ report of a limited company?

Select ONE answer:

  1. changes in stocks of finished goods
  2. distribution costs
  3. principal activities of the company
  4. turnover

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

Accounting Multiple Choice Question – 17 August 2022

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

apple devices books business coffee
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Big Ltd buys the business of Little Ltd with an issue of 400 000 shares of £1.00 each at a premium of £0.25 and £100 000 in cash.

The table shows an extract from the balance sheet of Little Ltd.

  • fixed assets – £260k
  • current assets – £80k
  • current liabilities – £50k

How much is paid for Goodwill for Little Ltd by Big Ltd?

Select ONE answer:

  1. £210 000
  2. £260 000
  3. £310 000
  4. £340 000

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 3

  1. Not correct
  2. Not correct
  3. Correct – 400,000 * £1.25 = £500K + £100K = £600k – (£260k + £80k – £50k) = £310,000
  4. Not correct

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

Accounting Multiple Choice Question – 16 August 2022

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

The summarised Balance Sheet of a sole trader shows:

  • fixed assets – £200 000
  • net current assets – £10 000
  • capital – £210 000

He agrees to sell his business to a limited company. The purchase consideration is £260 000 being made up of £60 000 cash, £80 000 debentures and 180 000 ordinary shares of £0.50 each.

Which amount will be credited to the share premium account of the limited company?

Select ONE answer:

  1. £30 000
  2. £50 000
  3. £90 000
  4. £120 000

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 1

  1. Correct – £60,000 + £80,000 + (180,000 * £0.5) = £230,000 ==> £260k – £230k = £30k
  2. Not correct
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 15 August 2022

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

apple devices books business coffee
Photo by Serpstat on Pexels.com

A limited company purchases a business by issuing 320 000 ordinary shares of £1.00 each at a premium of £0.75 per share.

Goodwill of £150 000 arises on the purchase.

What is the fair value of the separable net assets?

Select ONE answer:

  1. £170 000
  2. £410 000
  3. £560 000
  4. £710 000

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 2

  1. Not correct
  2. Correct – 320,000 * £1.75 – £150,000 = £410,000
  3. Not correct
  4. Not correct

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

Accounting Multiple Choice Question – 14 August 2022

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

Why might a company repay part of its share capital?

Select ONE answer:

  1. Its cash reserves exceed its requirements for the foreseeable future.
  2. Its shareholders need the cash.
  3. Its shares are valued below their nominal value on the open market.
  4. It wishes to decrease its gearing.

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

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

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