Tag: Cambridge Assessment

Accounting Multiple Choice Question – 18 January 2023

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

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During the year ended 31 March 2016, Alex plc made sales of £560,000 of which 25% were for cash.

The trade receivables at 31 March 2015 were £52,000 and at 31 March 2016 they were £56,000.

What is the Trade Receivables Days collection period based on the average receivables of the two year-ends?

Select ONE answer:

  1. 34 days
  2. 35 days
  3. 47 days
  4. 49 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 = = > (52 + 56) / 2) = £54k average debtors / (£560k * 75%) * 365 days
  4. Not correct

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Accounting Multiple Choice Question – 17 January 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 has a current ratio of 1.75 : 1 and a liquid capital (quick / acid test) ratio of 1 : 1.

The business sells inventory on credit at its usual mark-up.

What is the effect of this on the current ratio and quick (acid test) ratio if they sell more goods to customers on the usual credit and price terms?

Select ONE answer:

  1. current ratio quick DECREASE & (acid test) ratio DECREASE
  2. current ratio quick DECREASE & (acid test) ratio INCREASE
  3. current ratio quick INCREASE & (acid test) ratio DECREASE
  4. current ratio quick INCREASE & (acid test) ratio 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 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 January 2023

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

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The information below shows some extracts from Alex Ltd’s SOFP at 31 December 2014 and at 31 December 2015.

  • ordinary shares of £1 each: 31/12/14 – £100M & 31/12/15 – £130M
  • share premium account: 31/12/14 – £50M & 31/12/15 – £80M

On 1 July 2015 there was a bonus issue of 1 ordinary share for every 10 held.

On 1 October 2015 there was a rights issue.

There were no other reserve balances.

How much cash was received from the issue of shares in the year ended 31 December 2015?

Select ONE answer:

  1. £20M
  2. £30M
  3. £50M
  4. £60M

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 = = > Bonus issue was worth £10M, so Share premium would have gone down £10M. The subsequent rights issue would have been for 20M shares of £1 each at £3 per share = = > £60M

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Accounting Multiple Choice Question – 15 January 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

A company’s SOFP shows the following information:

£1 ordinary shares – £500k
Retained earnings – £400k
10% debentures – £300k
Total Capital Employed & Net Assets – £1,200k

A fully subscribed 1 for 4 rights issue at £2 per share is made and 50 % of the debentures are repaid at par.

What are the net assets following these changes?

Select ONE answer:

  1. £1,100k
  2. £1,175k
  3. £1,225k
  4. £1,300k

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 = £1,200 – (£300k / 2) + (500k / 4 * £2) = = > £1,300k

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Accounting Multiple Choice Question – 14 January 2023

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

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Which statement is correct?

Select ONE answer:

  1. A bonus issue of shares will increase the amount of cash available to the company.
  2. A rights issue of shares is always made at the nominal value of the shares.
  3. A rights issue of shares will increase the amount of cash available to the company.
  4. If shares are issued at an amount that is more than the nominal value of the shares, the excess must be debited to the share premium account.

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.