Tag: Debentures

Accounting Multiple Choice Question – 26 October 2023

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

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A company has issued £1M of 6% convertible debenture loans.

80% of holders converted at the rate of 48 ordinary shares of £0.25 each for each £100 of convertible debenture loans.

How many new ordinary shares were issued?

Select ONE answer:

  1. 384,000 shares
  2. 400,000 shares
  3. 480,000 shares
  4. 800,000 shares

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 == > (£1,000,000 / £100) * 48 shares * 0.8
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 10 September 2023

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

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What is NOT a source of long-term finance?

Select ONE answer:

  1. bank overdraft
  2. debentures
  3. ordinary shares
  4. preference shares

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 – 2 September 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’s statement of financial position at 31 December 2022 included the following non-current liabilities:

  • loan (repayable on 30 June 2024) – £120,000
  • 8 % debentures (2022-2025) – £70,000

The company intends to redeem half the debentures on 31 December 2024 and the remainder on 1 June 2025.

How should these liabilities be shown in the balance sheet at 31 December 2023?

Select ONE answer:

  1. current liabilities: debentures £35,000 and non-current liabilities: debentures £35,000 & loan £120,000
  2. current liabilities: debentures £70,000 and non-current liabilities: loan £120,000
  3. current liabilities: debentures £35,000 & loan £120,000 and non-current liabilities: debentures £35,000
  4. current liabilities: debentures £35,000 and non-current liabilities: debentures £35,000 & loan £120,000

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 3

  1. Not correct
  2. Not correct
  3. Correct
  4. Not correct

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