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Module 3

MCQs - Module Three: Principles of company accounts

Question One

Which of one of the following statements is false?

A. A LTD has limited liability

B. A sole trader has unlimited liability

C. A PLC’s shares are always listed on an exchange

D. Partners in a LLP can different potential liabilities 

Question Two

Which one of the following would you not find in a set of Micro accounts?

A. Net income

B. Fixed assets

C. Shareholders funds

D. Retained profits 

Question Three

Which equation correctly reflects a balance sheet?

A. Fixed assets - current assets + current liabilities - long term liabilities = shareholder funds

B. Net assets = Retained profits + share premium account + ordinary share capital

C. Total assets + Total liabilities = shareholder funds 

D. Net assets = Fixed assets + current assets  + shareholder funds

Question Four

You have been provided with the following information. 

Selling price per unit = £12

Operating costs per unit  = £6

Units sold = 1500

Interest cost = £200

Interest received = £50

Tax rate = 19%

Dividends = £50

Based on the above calculate operating profit:

Question Five

You have been provided with the following information:

2019 stated retained profits = £2,000

2020 net income = £8,000

2020 stated retained profits £6,000

Calculate the likely dividends that have been paid.

Question Six

An LTD has purchased a property for 17m which they plan to use for the long term premises of their business. Which of the following is true (noting there might or might not be multiple correct answers!)

A. Property is a fixed asset

B. Net income will be reduced by 17m

C. Cash will reduce by 17m

D. Liabilities of equity will increase