Tag: Topic 16

Accounting Multiple Choice Question – 28 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 capital structure of Alex plc is:

  • £1 ordinary shares – £40,000
  • convertible loan shares – £20,000
  • share premium – £10,000

The loan share conversion is made on the basis of 1 new ordinary share for every £4 of convertible shares held.

What is the capital structure of Alex plc after the conversion?

Select ONE answer:

  1. ordinary shares £40,000 & share premium £30,000
  2. ordinary shares £45,000 & share premium £25,000
  3. ordinary shares £50,000 & share premium £20,000
  4. ordinary shares £60,000 & share premium £10,000

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 2

  1. Not correct
  2. Correct – new ordinary shares £20,000 / 4 = £5,000 & share premium now £10k + £20k – £5k
  3. Not correct
  4. Not correct

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Accounting Multiple Choice Question – 27 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 redeems 1,000 preference shares of £1.00 each at a premium of 10 %.

The shares were originally issued at par and there is no share premium account.

How much will be charged to the profit and loss account?

Select ONE answer:

  1. £100
  2. £900
  3. £1,000
  4. £1,100

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 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct – £1 * 1.1 * 1,000

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