Accounting (limited Companies)

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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

17 Questions4 MinutesCreated by CalculatingEagle452

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

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

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

Accounting (limited Companies)

Understanding Limited Companies: An Accounting Quiz

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