Tag: Cambridge Assessment

Which profit figure is used in the calculation of earnings per share?

Select ONE answer:

1. accumulated profits
2. profit for the year after interest
3. profit for the year after interest and dividends
4. operating profit

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.

A published Balance Sheet for a company at 1 January 2015 included:

Ordinary share capital – £500M
Profit and Loss Account – £200M

The company results for the year to 31 December 2015 included:

profit before taxation – £50M
taxation – £15M
dividends proposed – £10M
revaluation surplus on land – £15M

What was the Profit and Loss Account balance at 31 December 2015?

Select ONE answer:

1. £225M
2. £240M
3. £250M
4. £265M

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 – £200M + (£50M – £15M – £10M)
2. Not correct
3. Not correct
4. Not correct

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

A company has issued a debenture loan carrying interest at the rate of 8 % payable every 31 December.

Also, each 31 December £20 000 of the debenture is redeemed.

At 31 December 2015 the total debenture loan outstanding was £100 000.

Which amounts should be disclosed in the company’s published Statement Of Financial Position at 31 December 2016?

Select ONE answer:

1. accrued interest £NIL / current liabilities £20,000 / long term loan £60,000
2. accrued interest £NIL / current liabilities £20,000 / long term loan £80,000
3. accrued interest £6,400 / current liabilities £NIL / long term loan £80,000
4. accrued interest £8,000 / current liabilities £20,000 / long term loan £80,000

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
2. Not correct
3. Not correct
4. Not correct

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

FRS 18 is an accounting statement that describes certain accounting policies including

1. accruals
2. consistency
3. going concern
4. prudence.

Which two accounting policies must be applied in the preparation of published accounts?

Select ONE answer:

1. 1 and 2
2. 1 and 3
3. 2 and 3
4. 2 and 4

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.

Alex Ltd acquires the whole of the net assets of Lucy and Co., an unincorporated business, for £450 000 in cash and £200 000 in shares.

The book values and fair values of Lucy and Co. at the time of acquisition are shown.

   net book value (£)  fair value (£)

fixed assets   235 000   315 000

current assets   465 000    290 000 

current liabilities   (197 000)     (230 000) 

   503 000   375 000

What is the value of the goodwill arising on acquisition?

Select ONE answer:

1. £75,000
2. £128,000
3. £147,000
4. £275,000

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 == > £450K + £200k = £650k – £375k == > £275k

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