Tag: Limited Company Financial Statements

Accounting Multiple Choice Question – 27 December 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 three of the following users of financial statements are likely to be interested in the financial statements of a very small private limited company?

  1. UK stock market analysts
  2. The company’s employees
  3. The company’s bank
  4. Very large Institutional shareholders
  5. The company’s suppliers

Select ONE answer:

  1. 2, 3 and 5
  2. 1, 3 and 5
  3. 2, 3 and 4
  4. 3, 4 and 5

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 – The company’s employees would be interested in the financial statements of the company as they want to know whether or not they would have a job in the future. The company’s bank may be interested in the financial statements as the company being a very small company, would need to take out loans from the bank. The bank wants to access the ability of the company to repay the loan. The company’s suppliers, similar to it’s employees, will want to know if they will be able to continue selling their products to the company in the future thereby building a good relationship with the company. UK stock market analysts may only be interested in public limited companies as it provides information about investment to aid investors into deciding which companies to invest in.
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 30 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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The issued share capital of Alex Trading plc is as follows:

  • 400,000 4 % preference shares of £1.00 each fully paid
  • 1,600,000 ordinary shares of £0.50 each fully paid
  • The company’s profit for the year after interest and tax is £128,000

An appropriate dividend cover for the ordinary share is 2.0 times.

What will be the dividend per ordinary share?

Select ONE answer:

  1. £0.035
  2. £0.040
  3. £0.070
  4. £0.080

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 = £128,000 – (£0.4M * 0.04) = £112k / 2 = £56k / 1,600 k shares = £0.035
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 27 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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Which accounting policy is not required to be disclosed in published company accounts?

Select ONE answer:

  1. basis of calculation of provision for doubtful debts
  2. basis of calculation of cost and net realisable value of stocks
  3. depreciation methods used
  4. treatment of goodwill

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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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 – 25 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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Alex Trading Ltd shows the following statement of financial position extract as at 31 December 2022.

  • ordinary share capital (£1 each) – £70,000
  • retained earnings – £6,200
  • 6% debentures repayable 2030 – £10,000
  • trade payables – £5,200
  • accruals – £2,700
  • prepayments – £4,100
  • bank overdraft – £20,200

What amount is shown as current liabilities as at 31 December 2022?

Select ONE answer:

  1. £24,000
  2. £28,100
  3. £38,100
  4. £40,200

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 – £5,200 + £2,700 + £20,200
  3. Not correct
  4. Not correct

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