Tag: Capital

Accounting Multiple Choice Question – 18 September 2024

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

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The following balances have been extracted from Alex Ltd’s Trial Balance as at 31 December 2018.

                                                                                                                                                                                             Debit                  Credit

Retained profits as at 1 January 2018 £4,695,600
10% debentures issued in 2015 £1,300,000
Debenture interest paid £65,000

Operating profit for the year ended 31 December 2018 is £520,000. Corporation tax for the year has been estimated at £156,000.

What is the figure for retained profits in Alex’s SOFP as at 31 December 2018?

Select ONE answer:

  1. £4,929,600
  2. £4,994,600
  3. £5,059,600
  4. £5,215,600

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 – 4,695,600 + 520,000 – (130,000) – (156,000) = 4,929,600
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 17 September 2024

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

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Alex Ltd issues 250,000 equity shares with a nominal value of £2 each at a price of £3.55 each for cash.

Which of the following sets of entries would be made to record this transaction?

Select ONE answer:

  1. Credit Bank £887,500, Debit Share capital £500,000, Debit Share premium £387,500
  2. Debit Bank £887,500, Credit Share capital £250,000, Credit Share premium £637,500
  3. Debit Bank £887,500, Credit Share capital £500,000, Credit Share premium £387,500
  4. Credit Bank £887,500, Debit Share capital £250,000, Debit Share premium £637,500

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 == > Cash raised is 250,000 x £3.55 = £887,500, which is debited to cash at bank. The credit to share capital is 250,000 x £2 = £500,000, while the credit share premium is250,000 x £1.55 = £387,500
  4. Not correct

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Accounting Multiple Choice Question – 15 September 2024

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

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Non-current assets are equivalent to fixed assets?

Select ONE answer:

  1. False
  2. True
  3. Only for specific types of non-current assets relating to manufacturing
  4. It depends

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. Notcorrect
  2. Correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 14 September 2024

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

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Creditors falling due after more than one year are equivalent to current liabilities?

Select ONE answer:

  1. False
  2. True
  3. Only for specific types of financial current liabilities
  4. It depends

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

Accounting Multiple Choice Question – 13 September 2024

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

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In the UK which of the following are responsible for the preparation of company annual financial statements?

Select ONE answer:

  1. The shareholders
  2. The board of directors
  3. The auditors
  4. The members

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. Notcorrect
  2. Correct – by law it is the board of directors which is responsible for preparing financial statements.
  3. Not correct
  4. Not correct

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