Tag: Non-Profit

Alex Ltd uses the first-in, first-out (FIFO) method to value its stocks of finished goods.

As at 1 January there were stocks of 25 units that had cost £54 each.

During January, the following transactions occurred:

8 January – 10 units were sold for £62 each
15 January – 10 units were purchased for £55 each
22 January – 10 units were sold for £62 each

What was the value of Alex Ltd’s closing stock as at 13 January?

Select ONE answer:

1. £815
2. £810
3. £825
4. £820

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – There are only (25 – 10 + 10 – 10) = 15 units in stock at the end of January. 10 of these are valued at £55, and the remainder at £54: (10 × £55) + ( 5 × £54) = £820

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What does GAAP stand for?

Select ONE answer:

1. Generally Agreed Accounting Policies
2. Generally Accepted Accounting Policies
3. Generally Agreed Accounting Practice
4. Generally Accepted Accounting Practice

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 4

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

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

As at 1 June 2023 Alex plc had 400,000 10p (face value) equity shares, which it issued in 2020 at a value of £2.20 each, which were fully paid.

It also had 200,000 of £1 8% of irredeemable preference shares issued at par in 2021.

On 31 January 2024 Alex plc made a further issued of 45,000 of the £1 irredeemable 8% preference shares at £1.50 fully paid.

On the same date Alex plc made a 1 for 4 bonus issue of equity shares.

Alex plc wishes to use the share premium account in respect of the bonus issue operation.

In its statement of financial position as at 31 May 2024, Alex plc Brazil will have share premium?

Select ONE answer:

1. £452, 500
2. £762,500
3. £830,000
4. £852,500

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > Share Premium Account Balance B/D Credit £840,000 (Ordinary shares 400,000 * £2.20 – £0.10) + Credit Preference Shares £22,500 (45,000 * £1.50 – £1) less Bonus Issue £10,000 (400,000 / 4 * £0.10) == > £852,500

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