Tag: Management Accounting

Alex plc is finalising certain figures that will appear in its financial statements as at 30 April 2024.

Relevant initial trial balance figures are as follows:

• Trade and other payables (excluding interest payable)  £246,800
• 6% debentures as at 1 May 2023  £400,000

Alex plc issued 6% debentures of £120,000 at par on 1 February 2024, repayable at par in ten years’ time.  No interest was outstanding at 1 May 2023, and the company paid interest in respect of debentures of £24,000 in the period to 30 April 2024.

What will be the value of trade and other payables figure (NOW including interest payable) that will appear in Alex plc’s statement of financial position as at 30 April 2024?

Select ONE answer:

1. £222,800
2. £246,800
3. £248,600
4. £272,600

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 3

1. Not correct
2. Not correct
3. Correct == > Total interest charge for the year should be the total of original debentures (£400,000 × 6%) = £24,000 (i.e. cash paid) + new debentures (£120,000 × 6% × 3/12) = £1,800) for a total interest in the I/S for the year of £25,800 == > Therefore the closing accrual should be £1,800, giving a total trade and other payables total of (246,800 + 1,800) = £248,600
4. Not correct

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Alex plc is finalising certain figures that will appear in its financial statements as at 30 September 2023.

In its initial trial balance for the year-end, Alex plc has a figure for tax payable as at 1 October 2022 of £114,520.

The total tax charge in the income statement for the year to 30 September 2023 is £145,670, and tax paid in the year was £123,090.

The tax payable balance that will appear in Alex plc’s statement of financial position as at 30 September 2023 is?

Select ONE answer:

1. £91,940
2. £114,520
3. £137,100
4. £382,000

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 == > Dr Bank Payments £123,090 + Bal c/d £137,100 = Total £260,190 – Cr Balance B/D £114,520 == > I/S £145,670
4. Not correct

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Alex plc has share capital of 300,000 £1 (face value) shares as at 1 March 223. These 300,000 shares were issued at a price of £1.50
per share.

On 28 February 2024 Alex pic made a 2 for 3 bonus issue.

Before accounting for this the balance on the retained earnings reserve as at 28 February 2024 was £717,000.

In its statement of financial position as at 28 February 2024 the balance on Alex plc’s retained earnings reserve will be?

Select ONE answer:

1. £517,000
2. £567,000
3. £667,000
4. £717,000

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 – £717,000 – £50k (balance of Bonus issue of £200,000, remaining £150K taken from share reserve).
4. Not correct

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

Alex plc is a retailer that owns no properties and only has fixtures and fittings as non-current assets, all of which were purchased within the last six months.

The company has been experiencing trading problems for some time.

The directors have concluded that the company is no longer a going concern and have changed the basis of preparing the financial statements to a break-up (gone concern) basis.

Which ONE of the following will be the immediate effect of changing the accounting concept of Going Concern now to the break-up basis?

Select ONE answer:

1. The company ceases to trade
2. All fixtures and fittings are transferred from non-current to current assets
3. Fixtures and fittings are valued at their historical book value
4. A liquidator is appointed

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 ==> If a company is no longer a going concern, then the directors have concluded that it will not trade for the foreseeable future (i.e. less than twelve months) and so all non-current assets and liabilities are transferred to current assets and current liabilities respectively
3. Not correct
4. Not correct

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