What is paid-up share capital?
the total amount of money owned by the company
the value of shares actually issued by the company
the amount requested from shareholders by the company
the amount received by the company for issued shares
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What are the features of a debenture?
return received | rate of return | voting rights | |
|---|---|---|---|
A | dividend | based on profit | yes |
B | dividend | fixed rate | no |
C | interest | based on profit | yes |
D | interest | fixed rate | no |
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Who has limited liability within a limited liability company?
shareholders
employees
managers
lenders
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What is an advantage of being a shareholder of a limited company?
Financial statements do not need to be prepared for limited companies.
The company is a separate legal entity.
All shareholders are paid dividends each year.
All shareholders have voting rights.
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Which of the following increases the total equity of a limited company?
paying dividends to ordinary shareholders
borrowing money from lenders
issuing shares
1 only
2 and 3
1 and 3
3 only
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What can cause a decrease in the total equity of a company?
an issue of shares
a transfer to general reserve
a payment of dividends to ordinary shareholders
a loss for the year
1 and 4
3 and 4 only
2 and 4 only
2, 3 and 4
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ABC Limited has the following types of equity and liabilities.
debentures
general reserves
long-term bank loan
ordinary share capital
preference share capital (non-redeemable)
redeemable preference shares
retained earnings
What is included in the company's liability section in the statement of financial position?
1 and 3 only
1, 3 and 5
1, 3 and 6
1, 2, 3 and 7
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Which statements are correct in relation to the financial statements of a limited company?
An issue of shares is shown in the income statement.
Debentures issued are shown in the statement of financial position.
The payment of ordinary dividends is shown in the statement of changes in equity.
Proposed dividends which have not been paid are shown in the statement of changes in equity.
1 and 2
1, 2 and 3
2 and 3 only
2, 3 and 4
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A limited company provided the following information.
$ | |
issued share capital (40 000 ordinary shares of $1 each) | 40 000 |
profit for the year ended 31 May 2024 | 18 000 |
transfer to general reserve during the year | 8 000 |
interim ordinary share dividend paid on 1 January 2024 | 4 000 |
On 31 May 2024, the directors decided to use the remaining profit to pay a final ordinary share dividend.
Which percentage final dividend did the ordinary shareholders receive?
15%
25%
35%
45%
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During the financial year, XY Limited paid debenture interest of $2 500 relating to that financial year. At the end of the year, debenture interest of $500 was accrued.
How was debenture interest shown in the financial statements for the year?
income statement $ | statement of changes in equity $ | |
|---|---|---|
A | 2 500 | no entry |
B | 3 000 | no entry |
C | 2 500 | 500 |
D | 3 000 | 500 |
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The draft financial statements of a limited company showed retained earnings of $42 540. It was then found that no adjustment had been made for the following.
$ | |
commission receivable prepaid | 1 200 |
insurance accrued | 650 |
What was the correct amount of the retained earnings?
$40 690
$41 990
$43 090
$44 390
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