Tag: Limited Company Financial Statements

Accounting Multiple Choice Question – 17 June 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 issues 1M ordinary shares of £1 each for £3 each and £500k 6 % debentures.

By what amount will the net assets of Alex plc increase as a result of these transactions?

Select ONE answer:

  1. No increase
  2. £2.5M
  3. £3.0M
  4. £3.5M

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 – Dr Cash £3M + £0.5M Cr NCL £0.5M SC £3M = = > A – L = C = £3.5M – £0.5M = £3M
  4. Not correct

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Accounting Multiple Choice Question – 16 June 2023

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

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Photo by Serpstat on Pexels.com

The directors of lucy Ltd are completing the accounts for the year ended 31 December 2022.

They discover that the Inventory at the start of the financial year at 1 January 2022 was over-valued by £100k.

What is the effect of correcting this error in the accounts?

Select ONE answer:

  1. Profit for the year ended 31 December 2022 DECREASE & Revenue reserves brought forward as at 1 January 2022 DECREASE
  2. Profit for the year ended 31 December 2022 DECREASE & Revenue reserves brought forward as at 1 January 2022 INCREASE
  3. Profit for the year ended 31 December 2022 INCREASE & Revenue reserves brought forward as at 1 January 2022 DECREASE
  4. Profit for the year ended 31 December 2022 INCREASE & Revenue reserves brought forward as at 1 January 2022 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 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.