Tag: Topic 17

Accounting Multiple Choice Question – 8 September 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 annual results are shown below:

  • profit for the year – £215,000
  • preference dividends – £15,000
  • ordinary dividends – interim paid – £25,000
  • ordinary dividends – final approved – £75,000
  • retained profit for the year – £100,000

The final ordinary dividend has been approved by the shareholders, but for financial reasons will only be paid after one year.

What are the ‘earnings’ to be included in the earnings per share calculation?

Select ONE answer:

  1. 100,000
  2. 175,000
  3. 200,000
  4. 215,000

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: £215k – £15k
  4. Not correct

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Accounting Multiple Choice Question – 7 September 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 Trading plc wishes to reduce its gearing.

Select ONE answer:

  1. a bonus issue of ordinary shares
  2. an issue of debentures
  3. an issue of convertible loan stock
  4. a rights issue of ordinary shares

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

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Accounting Multiple Choice Question – 6 September 2023

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 shows the effect of Alex plc raising a loan to buy non-current assets?

Select ONE answer:

  1. Asset Use Ratio – Decrease AND Gearing – Decrease
  2. Asset Use Ratio – Decrease AND Gearing – Increase
  3. Asset Use Ratio – Increase AND Gearing – Decrease
  4. Asset Use Ratio – Increase AND Gearing – 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 2

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

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Accounting Multiple Choice Question – 4 September 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 makes annual profits of £30M before paying interest of £6M and ordinary dividends of £10M.

It has in issue 20M shares of £0.50 each, currently valued on the Stafford stock exchange at £15 each.

What is the company’s price-earnings ratio?

Select ONE answer:

  1. 8.3
  2. 10.0
  3. 12.5
  4. 21.4

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 – market value per share / EPS (Profit after Interest before tax / Issued Shares) == > £15 / (£30M – £6M / 20M) = 12.5
  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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This work is licensed under a Creative Commons Attribution 4.0 International License.