Tag: Preference Shares

Accounting Multiple Choice Question – 20 September 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 end of its first year of trading on 30 June 2021 Alex Ltd’s net assets are £207,594.

It has share capital of £50,000 made up of 25p equity shares issued at 40p each, and a retained profits reserve of £107,594.

In relation to Alex Ltd’s balance sheet as at 30 June 2021 which of the following be true?

Select ONE answer:

  1. It has a general reserve of £50,000
  2. It has share premium of £100,000
  3. It has a general reserve of £20,000
  4. It has share premium of £50,000

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 == > Share capital + Share Premium of £30K + profit reserve + General Reserve (Balance Number) = Closing position
  4. Not correct

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Accounting Multiple Choice Question – 19 September 2024

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

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Which of the following transactions would initially be recorded in a company’s journal rather than its cash book?

Select ONE answer:

  1. Bonus issue of shares
  2. Sale of goods for cash to a customer
  3. Receipt of loan from a bank
  4. Purchase for cash of shares in another company

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 – 18 September 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 following balances have been extracted from Alex Ltd’s Trial Balance as at 31 December 2018.

                                                                                                                                                                                             Debit                  Credit

Retained profits as at 1 January 2018 £4,695,600
10% debentures issued in 2015 £1,300,000
Debenture interest paid £65,000

Operating profit for the year ended 31 December 2018 is £520,000. Corporation tax for the year has been estimated at £156,000.

What is the figure for retained profits in Alex’s SOFP as at 31 December 2018?

Select ONE answer:

  1. £4,929,600
  2. £4,994,600
  3. £5,059,600
  4. £5,215,600

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 1

  1. Correct – 4,695,600 + 520,000 – (130,000) – (156,000) = 4,929,600
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 17 September 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 issues 250,000 equity shares with a nominal value of £2 each at a price of £3.55 each for cash.

Which of the following sets of entries would be made to record this transaction?

Select ONE answer:

  1. Credit Bank £887,500, Debit Share capital £500,000, Debit Share premium £387,500
  2. Debit Bank £887,500, Credit Share capital £250,000, Credit Share premium £637,500
  3. Debit Bank £887,500, Credit Share capital £500,000, Credit Share premium £387,500
  4. Credit Bank £887,500, Debit Share capital £250,000, Debit Share premium £637,500

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 3

  1. Not correct
  2. Not correct
  3. Correct == > Cash raised is 250,000 x £3.55 = £887,500, which is debited to cash at bank. The credit to share capital is 250,000 x £2 = £500,000, while the credit share premium is250,000 x £1.55 = £387,500
  4. Not correct

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Accounting Multiple Choice Question – 16 September 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 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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