Tag: Non-Profit

Accounting Multiple Choice Question – 15 August 2024

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

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At the 1 July 2023, the capital structure of Alex ltd was as follows:

  • 200,000 equity ordinary shares of 25p each £50,000
  • Share premium account £75,000

In the year ended 30 June 2024 the company made the following changes to their capital structure:

30 April 2024 – 1 for 5 rights issue at £1.25 per share and this was taken up in full.

What was the company’s capital structure in terms of share premium as at 30 June 2024 following the rights issue?

Select ONE answer:

  1. £35,000
  2. £75,000
  3. £85,000
  4. £115,000

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – 200,000/5 = 40,000 shares.  Balance on share premium account thus becomes £75,000 + (40,000 x £1) = £115,000

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Accounting Multiple Choice Question – 14 August 2024

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

Photo by Nataliya Vaitkevich on Pexels.com

At the 1 July 2023, the capital structure of Alex plc was as follows:

1,000,000 equity ordinary shares of 50p each £500,000
Share premium account £400,000

In the year ended 30 June 2024 the company made the following changes to their capital structure:

  • 1 January 2024 – 1 for 4 bonus issue.
  • 30 April 2024 – 1 for 10 rights issue at £1.50 per share and this was taken up in full.

What was the company’s capital structure in terms of share capital and share premium as at 30 June 2024?

Select ONE answer:

  1. Equity Share Capital £687.5k and Share Premium Account £650k
  2. Equity Share Capital £675k and Share Premium Account £375k
  3. Equity Share Capital £687.5k and Share Premium Account £150k
  4. Equity Share Capital £687.5k and Share Premium Account £400k

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 – Shares at start of year = 1M, add Bonus issue 250k shares and then rights issue 125k shares for a total of 1,375k shares. Capital is £500k + Bonus issue £125k + Rights issue £62.5k for a total of £687.5k then Share Premium is £400k – Bonus issue £125k + Rights issue £125k for a total of £400k

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Accounting Multiple Choice Question – 12 August 2024

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

Photo by Nataliya Vaitkevich on Pexels.com

For the two statements below:

  1. A material profit or loss on the sale of part of the entity must appear in the income statement as an extraordinary item.
  2. Dividends should be included in the income statement.

Decide whether they are true or false?

Select ONE answer:

  1. Statement 1 – True, Statement 2 – True
  2. Statement 1 – True, Statement 2 – False
  3. Statement 1 – False, Statement 2 – True
  4. Statement 1 – False, Statement 2 – False

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 – Extraordinary items are prohibited. Dividends appear in the statement of retained earnings not the income statement

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Accounting Multiple Choice Question – 3 August 2024

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

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Alex Ltd is considering several options to market a new product called the Staffordshire with Lucy Ltd’s help.

Which of the following business structures is a joint venture?

Select ONE answer:

  1. Buy Lucy Ltd and market the Staffordshire through that company
  2. Form a project team with employees of both Alex Ltd and Lucy Ltd and market the Staffordshire through that team
  3. With Lucy Ltd as equal partner, form Allu Ltd and market the Staffordshire through that company
  4. Sell Lucy Ltd the right to market the Staffordshire in return for a percentage of the revenues

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 –> Purchasing the company will make it part of a group; forming a project team is a form of strategic alliance (a strategic alliance is more informal), while selling Lucy the marketing rights in return for a fee is a licensing. agreement.  Allu Ltd would be a separate legal entity owned 50:50 by the two companies and this is the most usual form of joint venture.
  4. Not correct

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Accounting Multiple Choice Question – 2 August 2024

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

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The Lucy Partnership comprises of six partners who share profits in the following ratio 6:5:4:3:2:1

They are considering incorporation as a limited company, Lucy Partners Ltd.

Only the six partners will become shareholders on incorporation.

In relation to Lucy Partners Ltd, which of the following statements is necessarily true?

Select ONE answer:

  1. All partners will be equal shareholders in Lucy Partners Ltd
  2. If Lucy Partners Ltd wishes to raise new share capital, the number of shareholders may be allowed to rise above six
  3. All shareholders will become directors and will have the right to be equally involved in the management of the new Limited company
  4. If one of the shareholders in Lucy Partners Ltd dies, the company will be dissolved

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  –> Shareholders do not have an  automatic right to be a director or to be involved in management (3).  The partners’ individual shareholdings will be determined by an agreement that is not necessarily related to the existing partnership agreement (1). The concept of perpetual succession means that the company will not dissolve upon the death of a shareholder (4).
  3. Not correct
  4. Not correct

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