Tag: Topic 17

Accounting Multiple Choice Question – 12 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’s authorised share capital is 1 million ordinary shares of £1 each.

800,000 shares have been issued and have a market value of £2.50 each.

Year end results show the following:

  • profits before interest and taxation – £100k
  • profits after interest and taxation – £80k
  • profits after interest, taxation and ordinary dividends – £50k

What is the price-earnings ratio?

Select ONE answer:

  1. 10
  2. 20
  3. 25
  4. 40

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- £2.50 / (£80,000 / 800,000) ==> 25
  4. Not correct

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Accounting Multiple Choice Question – 23 June 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 the capital structure of Alex plc is as follows:

  • ordinary shares of £1 each – £100k
  • share premium account – £200k
  • retained profits – £300k
  • 15% Debenture Loan (issued 5 years ago) – £400k
  • Total Share and Debt Capital – £1M

Operating profits average £260k per annum.

What is the return on shareholders’ funds of Alex plc’s shareholders?

Select ONE answer:

  1. 26.0%
  2. 33.3%
  3. 43.3%
  4. 66.7%

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 – £260k – (£400k * 15%) = = > £200k / £0.6M = 33.33%, ROCE would be £260k / £1M = = > 26%
  3. Not correct
  4. Not correct

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