Tag: Topic 8

Accounting Multiple Choice Question – 16 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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Which of the following correctly shows the effect of a company increasing the value of its freehold property?

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 1

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

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Accounting Multiple Choice Question – 15 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 has a gross profit to sales ratio of 40 %, and a net profit to sales ratio of 10 %.

If the sales volume increases by 8 % which of the following will generally be true?

Select ONE answer:

  1. gross profit to sales ratio – Increase AND net profit to sales ratio – Decrease
  2. gross profit to sales ratio – Increase AND net profit to sales ratio – Increase
  3. gross profit to sales ratio – Unchanged AND net profit to sales ratio – Decrease
  4. gross profit to sales ratio – Unchanged AND net profit to sales ratio – 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 4

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

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Accounting Multiple Choice Question – 14 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 sales are made evenly over a year (360 days).

10 % of the sales are for cash.

The debtor balance is £26,700 and the debtor collection period is 30 days.

What are the total sales (cash and credit) for the year?

Select ONE answer:

  1. £320,400
  2. £356,000
  3. £801,000
  4. £890,000

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 – £26,700 * 12 = £320,400 / 0.9 = £356,000
  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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This work is licensed under a Creative Commons Attribution 4.0 International License.

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.

Photo by Olya Kobruseva on Pexels.com

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

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