Tag: Cambridge Assessment

The information in the table relates to Alex plc:

• share premium account – £240,000
• 10 % debentures – £100,000
• retained profit – £180,000

The company redeems the debentures at a premium of 10 %.

What will be the effect on Alex’s Statement Of Financial Position?

Select ONE answer:

1. retained profit £70,000 / share premium account £240,000
2. retained profit £80,000 / share premium account £230,000
3. retained profit £170,000 / share premium account £240,000
4. retained profit £180,000 / share premium account £230,000

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 == > £240,000 – £100,000 * 0.1

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What will increase Alex plc’s gearing?

Select ONE answer:

1. an issue of debentures
2. an issue of ordinary shares
3. redemption of debentures
4. repayment of a long-term loan

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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Alex plc has ordinary shares with a nominal value of £10 each and a current market price of £20 each.

Earnings per share is £0.50, and dividend per share is £0.20.

What is the price earnings ratio?

Select ONE answer:

1. 20
2. 40
3. 50
4. 100

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- £20 / £0.5 = 40
2. Not correct
3. Not correct
4. Not correct

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

The following information has been obtained for a company:

• declared dividend rate – £0.05
• market price per share – £4.00
• nominal value of shares – £0.50

What is the dividend yield?

Select ONE answer:

1. 1.25%
2. 2.50%
3. 5.00%
4. 10.00%

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- £0.05 / £4.00 = 1.25%
2. Not correct
3. Not correct
4. Not correct

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