Accounting (limited Companies)
Understanding Limited Companies: An Accounting Quiz
Test your knowledge on the intricacies of accounting for limited companies with this comprehensive quiz. Designed for students, professionals, and anyone interested in corporate finance, this quiz covers essential topics in limited company accounting.
Key areas include:
- Appropriation accounts
- Shareholder rights
- Retained earnings
- Financial statements
Which item will not appear in the appropriation account of a limited company
A debenture interest
B ordinary share dividend
C preference share dividend
D transfer to general reserve
A difference between a public limited company (PLC) and a private limited company (Ltd) is that
The PLC has shareholders
The PLC has a limited number of shareholders
The PLC can sell shares on the open market
The PLC has limited liability
The stakeholders of a firm are those who hold equity in the firm
True
False
Which of the following will not be the most compelling reason for investing in a limited company rather than in a partnership
Limitation of liability
Perpetual succession
Divorce of management from ownership
Absence of confidentiality
Which of the following statements is incorrect?
Preference shares have priority right to receive dividend
Normally Preference shares have no votes at meetings of shareholders
Preference shares are always cumulative, even if the name does not confirm the position
In a company liquidation Preference shares are entitled to priority return of capital
Which of the following statements is correct?
Debentures will not receive interest in a year when the company makes an operating loss
Preference shares will get dividend only when ordinary shares too receive them
Ordinary shares could be paid dividend even when a company has negative retained earnings
Preference shares and debentures have priority right for a reward over ordinary shares
£15,000 still to be received, by the year end, out of the total amount receivable from a share issue should be reported on that company’s financial statements, as:
An income in the Statement of income
A liability on the Statement of financial position
An asset on the Statement of financial position
A loss on the Statement of income
Which is an intangible asset?
Goodwill
Inventory
Machinery
Trade receivables
What are retained earnings in a limited company?
A profits after dividends and after transfers to general reserve
B profits after dividends but before transfers to general reserve
C profits before dividends and before transfers to general reserve
D profits before dividends but after transfers to general reserve
A company prepares a statement of changes in equity. Which statement is true?
It explains the changes in the non-current liabilities
It indicates if there has been a transfer to the general reserve.
It is similar to the receipts and payments account in a club
It reconciles opening and closing balances on non-current assets
Which will appear in the income statement (profit and loss account) of a limited company?
A debenture interest paid
B preference share dividend paid
C retained profit brought forward
D transfer to general reserve
How is working capital calculated?
Current assets – current liabilities
Current assets + current liabilities
Non-current (fixed) assets + current assets – current liabilities
Non-current (fixed) assets + current assets + current liabilities
Which is a current liability for a Company?
A accrued interest charges on loan from bank
B provision for depreciation of non-current assets
C five-year loan from bank
D insurance premium prepaid
Which may be included in the appropriation account of a limited company?
Gross profit
Ordinary share dividends
Overhead expenses
Provision for depreciation
FD Paints Limited started trading on 1 January 2015. The company provided the following information for the year ended 31 December 2015. $ Profit for the year 80 000 Dividend paid 4 200 Dividend proposed 10 400 Transfer to general reserve 5 000 What were the retained earnings at 31 December 2015?
$60 400
$70 800
$75 800
$89 200
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