Tag: Topic 16

Accounting Multiple Choice Question – 25 August 2023

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 information has been taken from Alex’s accounts for the year ended 31 December.

  • profit for the year – £70,600
  • depreciation – £20,100
  • loss on sale of non-current assets – £1,900
  • increase in working capital – £14,300

What is the net cash flow from operating activities?

Select ONE answer:

  1. £38,100
  2. £74,500
  3. £78,300
  4. £103,100

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 – £70,600 +£20,100 + £1,900 – £14,300
  4. Not correct

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Accounting Multiple Choice Question – 13 August 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’s capital is made up as follows:

  • ordinary shares of £1.00 each – £200,000
  • share premium account – £80,000
  • Retained profits – £160,000

Changes now to be made (in the order given):

  • A one for one bonus issue
  • A rights issue of 100 000 ordinary shares of £1.00 each at £1.40 per share

The company wishes to maximise the amounts available to pay dividends.

What will be the ordinary capital and reserves of the company?

Select ONE answer:

  1. ordinary share capital £500,000 and share premium £40,000 and Retained profits £40,000
  2. ordinary share capital £500,000 and share premium £80,000 and Retained profits £NIL
  3. ordinary share capital £540,000 and share premium £NIL and Retained profits £40,000
  4. ordinary share capital £540,000 and share premium £40,000 and Retained profits £40,000

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 1

  1. Correct – a. Dr Share Premium Account £80,000 Dr Retained profits £120,000 Cr Share Capital £200,000 PLUS b. Dr Cash £140,000 Cr Share Capital £100,000 Cr Share Premium £40,000
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 12 August 2023

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

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The table shows extracts from the trial balance of Alex plc as at 31 December 2022.

  • ordinary share capital – £20,000
  • share premium – £40,000
  • long term loan (repayable 2027) – £30,000
  • bank overdraft – £60,000
  • 4 % preference share capital – £50,000
  • 7 % debentures 2032 – £70,000

What is the total of ‘creditors: amounts falling due after more than one year’ in the balance sheet?

Select ONE answer:

  1. £100,000
  2. £150,000
  3. £160,000
  4. £210,000

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 1

  1. Correct – £30,000 + £70,000
  2. Not correct
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 16 July 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 revalues its buildings upwards.

What is the impact on the following ratios?

Select ONE answer:

  1. Gearing – Decrease / Return on capital employed – Decrease
  2. Gearing – Decrease / Return on capital employed – Increase
  3. Gearing – Increase / Return on capital employed – Decrease
  4. Gearing – Increase / Return on capital employed – 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 1

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

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Accounting Multiple Choice Question – 10 July 2023

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

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The table below shows the capital structure of Alex plc:

  • share capital made up of £5 shares – £300k
  • share premium account – £200k
  • Retained earnings – £500k
  • 10 % debenture (issued 3 years ago) – £600k
  • OPERATING PROFITS average £150,000 a year.

What is the return on shareholders’ funds?

Select ONE answer:

  1. 9.0%
  2. 9.4%
  3. 15.0%
  4. 18.75%

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 – Correct – (150k – £60k (£600k debenture @ 10%) / £300K + £200k + £500k + £600k ==> 9.0%. – many people forget to deduct the interest of £60k from the operating profits when calculating the return on the shareholders’ funds.
  2. Not correct
  3. Not correct
  4. Not correct

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