Chapter 4 Accounting for Limited Companies
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Transcript of Chapter 4 Accounting for Limited Companies
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Multiple choice questions
Try the following multiple choice questions to test your knowledge of this chapter. Once you have answered
the questions, click on 'Submit Answers for Grading' to get your results.
If your lecturer has requested that you send your results, please complete the routing information found at
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This activity contains 10 questions.
Consider the following two statements:
The market value of a share is known as the par value1.
The face value of a share is known as the nominal value2.
What is the validity of each statement?
A
B
C
D
During the financial year, Modbury Ltd had the following increases in
reserves:
500,000 from a revaluation of freehold premises1.
800,000 in share premium2.
400,000 from trading profit retained3.
Which of these are increases in revenue reserves?
1 only
2 and 3
1 and 2
3 only
Consider the followin statements:
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The following gains may legally be withdrawn from the company byshareholders:
gains that arise from the upward revaluation of non-current assets1.
realised gains that arise from the sale of non-current assets
What is the validity of each statement?
2.
A
B
C
D
Which one of the following is correct?
Accounting Standards are created by:
company law
the Department of Trade and Industry
the International Accounting Standards Board
the Stock Exchange
Which one of the following is correct?
Auditors of a company are principally accountable to:
the shareholders
the Stock Exchange
the Department of Trade and Industry
the directors
Which one of the following is correct?
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The law imposes a legal obligation to maintain appropriate accounting
records for a company on:
the Company Secretary
the directors
the auditor
the Finance Director
Consider the following statements:
Preference shares are a more risky form of investment than ordinary shares1.
Preference shares are a more risky form of investment than loan capital2.
What is the validity of each statement?
A
B
C
D
The financial statements of Tamerton plc for the most recent year
indicated the following:
a bonus issue of shares1.
a transfer of trading profit to reserves2.
an increase in the revaluation reserve for non-current assets3.a rights issue of shares4.
Which of the above involved a movement of cash?
1 and 4
2 only
4 only
2 and 3
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