Tag: Accounting

The table shows an extract from a company’s accounts for the year ended 31 December 2019.

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What do these figures show about the company’s liquidity?

Select ONE answer:

1. It declined in year 2, but no further in year 3. 
2. It declined in year 2, but then improved in year 3. 
3. It has continually declined over the 3 years. 
4. It has continually improved over the 3 years.

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 – Year 1 (£44k + £204k / £126k + £34k) = 1.55, Year 2 (£58k + £182k / £152k + £46k) = 1.21, Year 3 (£56k + £162k / £150k + £44k) = 1.12
4. Not correct

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The table shows an extract from a company’s accounts for the year ended 31 December 2001. 

credit sales — £200,000
cost of sales — £160,000
debtors — £32,876
creditors — £24,658

What is the trade receivable or debtor collection period?

Select ONE answer:

1. 30 days
2. 45 days
3. 60 days
4. 75 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 – (32,876 / 200,000) * 365
4. Not correct

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

Using your own knowledge of the general business environment, which business is likely to have the lowest Gross Profit / Sales margin?

Select ONE answer:

1. a car manufacturer
2. a computer software company
3. a jewellery shop
4. a supermarket

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.

At the beginning of the year a company has authorised share capital of 400,000 £1 ordinary shares and issued share capital of 200,000 £1 ordinary shares.

During the year the company makes a further issue of 100,000 £1 ordinary shares at a price of £2.40 each.

What is the balance on the Share Capital account at the end of the year?

Select ONE answer:

1. £300,000
2. £440,000
3. £500,000
4. £640,000

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 – 200k * £1 + 100k * £1 (the difference is share premium)
2. Not correct
3. Not correct
4. Not correct

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

A company increases its provision for doubtful debts.

How does this affect the cash flow statement? 

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 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.