Limited companies

Which item does not change the total equity of a limited company?

Feb/March 2020

What does the term called-up share capital mean?

Feb/March 2020

A limited company gave the information below. - Issued share capital (50 000 ordinary shares of $\$1$ each): $\$50\,000$ - Profit for the year ending 31 December 2019: $\$13\,000$ - Transfer to general reserve on 31 December 2019: $\$6\,000$ - Interim ordinary share dividend paid during the year: $\$3\,000$ On 31 December 2019, it was agreed that the profit left over would be used to pay a final ordinary share dividend. What percentage final dividend would the ordinary shareholders receive?

Feb/March 2020

A limited liability company is created. Who holds limited liability?

Feb/March 2023

Which of the following statements are correct about the financial statements of a limited company? 1 An ordinary dividend paid appears in the income statement. 2 A transfer into the general reserve is shown in the statement of changes in equity. 3 Debentures issued are shown in the statement of changes in equity. 4 A proposed dividend is not included in the income statement.

Feb/March 2023

Which of the following statements about a statement of financial position is correct?

Feb/March 2024

What can lead to an increase in a company’s total equity?

Feb/March 2024

What does the term called-up share capital mean?

Feb/March 2024

Which item forms part of the equity of a limited company?

Feb/March 2025

At the beginning of the year, X Limited had ordinary share capital of $\$100000$. During the year, an ordinary share dividend of $\$3000$ was paid. After that, another $\$10000$ of ordinary shares were issued. The profit for the year came to $\$8000$. By how much had equity risen by the end of the year?

May/June 2021

Which sources of finance for a limited liability company earn a fixed return on the money they invest?

May/June 2021

The trial balance for HV Limited as at 31 March 2021 was presented as follows. HV Limited Trial Balance at 31 March 2021 Debit and credit balances shown. Additional information 1 Inventory at 31 March 2021 had a value of $6090. 2 Fittings are to be depreciated at 20% per annum by the reducing balance method. 3 Rent contains a payment of $1800 covering the 3 months from 1 March 2021 to 31 May 2021. 4 Wages accrued at 31 March 2021 amounted to $2250. 5 No debenture interest was paid for the year ended 31 March 2021. 6 There were no dividends outstanding at 31 March 2021. 7 $2000 is to be moved to a general reserve on 31 March 2021.

May/June 2021

At 31 March 2021, the trial balance of HV Limited was presented as follows. HV Limited Trial Balance as at 31 March 2021 Debit ($): Inventory at 1 April 2020 5820; Purchases 64900; Rent and insurance 9280; Wages 24750; Operating expenses 8500; Fittings at cost 200000; Trade receivables 12500; Bank 13765; Dividend paid on ordinary shares 5600. Credit ($): Revenue 145000; Provision for depreciation of fittings 72000; Trade payables 6615; 4% Debentures (repayable 1 April 2031) 30000; Ordinary share capital 70000; Retained earnings 21500. Totals: Debit **345115**, Credit **345115**. Further information: 1 Inventory at 31 March 2021 was valued at $6090. 2 Depreciation on fittings is to be charged at 20% per annum using the reducing balance method. 3 Rent includes a payment of $1800 for the 3 months from 1 March 2021 to 31 May 2021. 4 Accrued wages at 31 March 2021 were $2250. 5 No debenture interest has been paid for the year ended 31 March 2021. 6 No dividends were outstanding at 31 March 2021. 7 $2000 is to be transferred to a general reserve on 31 March 2021.

May/June 2021

A limited company obtained finance through a debenture issue. Which statement is correct?

May/June 2022

A limited company gave the following data. equity total at 1 January 2021: $500\,000$ ordinary share dividend paid on 30 June 2021: $25\,000$ amount transferred to general reserve on 31 December 2021: $12\,000$ equity total at 31 December 2021: $558\,000$ How much profit was earned during the year?

May/June 2022

The draft financial statements for a limited company reported retained earnings of $31\,820. It was later discovered that the following adjustments had not been entered: accrued commission receivable $450; prepaid insurance $175. What is the correct retained earnings figure?

May/June 2022

As at 30 November 2021, the trial balance for M Limited was given below. M Limited Trial Balance at 30 November 2021

May/June 2022

The trial balance for M Limited on 30 November 2021 was presented as follows.

May/June 2022

What is one advantage of becoming a member of a limited company?

May/June 2023

A limited company was given the following information: - issued share capital (50000 ordinary shares of $1 each): $50000 - profit for the year ended 31 December 2022: $13000 - amount transferred to general reserve during the year: $6000 - interim ordinary share dividend paid during the year: $3000 On 31 December 2022, the decision was taken to use the remaining profit to pay a final ordinary share dividend. What percentage final dividend would the ordinary shareholders receive?

May/June 2023

What does the term equity mean?

May/June 2023

What does the term equity mean?

May/June 2023

Q Limited draws up its financial statements to 31 March each year. At 1 April 2022, the company’s retained earnings stood at $16250. In the year ended 31 March 2023, the company earned a profit of $43500 (after charging all expenses and interest). Dividends totalling $39000 for the year had been paid by 31 March 2023. After the income statement was completed, the following balances were taken from the company’s ledger accounts. Fittings and equipment at cost $150000 Provision for depreciation of fittings and equipment $40650 Motor vehicles at cost $72000 Provision for depreciation of motor vehicles $31125 Inventory $51790 Balance at bank $1076 debit Trade receivables $19700 Provision for doubtful debts $591 Trade payables $31450 5% Debentures (repayable 2029) $40000 Bank loan (repayable 2027) $10000 Ordinary share capital $120000

May/June 2023

A company provided the following details. issued and paid up share capital: \$30000 general reserve: \$4500 long-term bank loan: \$800 retained earnings: \$3500 6% debentures: \$2500 What is the total equity?

May/June 2024

Which of the following are common to both debentures and preference shares? The features to consider are: no voting rights, a fixed rate of return, and included in capital employed.

May/June 2024

T Limited was set up on 1 April 2019. In all, $220\,000$ shares of $2$ each were issued, and shareholders were required to pay $75\%$ of the share value at once, with the remaining $25\%$ due on 1 April 2020. By 1 June 2019, the holders of $190\,000$ shares had paid the amount owing. Calculate the paid up capital on 1 June 2019.

May/June 2024

Which of these items would be included in the statement of changes in equity for X Limited for the year ending 30 June 2020?

May/June 2024

T Limited was established on 1 April 2019. In total, $220\ 000$ shares of $2 each$ were issued, and the shareholders were required to settle $75\%$ of the share value at once, with the remaining $25\%$ payable on 1 April 2020. By 1 June 2019, the holders of $190\ 000$ shares had met the amount payable. What was the paid up capital on 1 June 2019?

May/June 2024

Which items would be shown in the statement of changes in equity of X Limited for the year ended 30 June 2020?

May/June 2024

Zahra and Panya hold the shares in, and act as directors of, Q Limited. The directors of Q Limited have given the following trial balance. Q Limited Trial balance on 31 January 2024 Debit / Credit totals: Revenue $78 000 (credit) Purchases $38 200 Rent and insurance $10 600 Directors’ salaries $19 000 General expenses $3 420 Advertising $5 400 Dividends paid $2 500 Fittings at cost $18 000 Provision for depreciation of fittings $5 400 (credit) Inventory at 1 February 2023 $2 950 Cash at bank $915 Trade payables $2 288 (credit) Ordinary share capital $13 000 (credit) Retained earnings $2 297 (credit) Further information: 1 Inventory at 31 January 2024 was valued at $4720. 2 Depreciation on fittings is to be charged at 10% per annum using the straight-line method. 3 Payment for advertising, $75, is outstanding at 31 January 2024. 4 No dividends were outstanding at 31 January 2024.

May/June 2024

R Limited supplied the information below. On 1 January 2024: ordinary share capital $350\,000$, retained earnings $46\,000$, general reserve $37\,000$. During the year ending 31 December 2024: profit for the year $32\,000$, dividends paid $20\,000$. What was total equity worth at year end?

May/June 2025

What benefits do shareholders gain from operating as a limited company?

May/June 2025

R Limited supplied the information below. On 1 January 2024: ordinary share capital $350\,000$ retained earnings $46\,000$ general reserve $37\,000$ For the year ended 31 December 2024: profit for the year $32\,000$ dividends paid $20\,000$ What was the amount of total equity at the end of the year?

May/June 2025

H Limited draws up its financial statements to 30 April each year. In the year ended 30 April 2025, these events occurred: 1. The company reported profit for the year of $26 700 after debenture interest was charged. 2. $5 000 was transferred to the general reserve. 3. $5 340 in dividends was paid. No further dividends are due for the year. H Limited supplied these ledger account balances at 30 April 2025: Fixtures and equipment, book value $155 000 Motor vehicles, book value $16 875 Inventory $28 120 Trade payables $26 815 Trade receivables $33 000 Provision for doubtful debts $990 Bank overdraft $5 195 $5 000 5% Debentures (repayable 2029)

May/June 2025

H Limited draws up its financial statements each year to 30 April. In the year ended 30 April 2025, the following events occurred: 1. After debenture interest had been charged, the company reported a profit for the year of $26 700. 2. $5000 was transferred to the general reserve. 3. A dividend of $5340 was paid. No further dividends are due for the year. H Limited supplied these ledger account balances at 30 April 2025: Fixtures and equipment at book value $155 000 Motor vehicles at book value $16 875 Inventory $28 120 Trade payables $26 815 Trade receivables $33 000 Provision for doubtful debts $990 Bank overdraft $5 195 5% Debentures (repayable 2029) $5 000

May/June 2025

Z Limited supplied the following figures. 5% debentures: \$500 General reserve: \$250 Issued ordinary share capital: \$3000 Retained earnings: \$750 Short-term bank loan: \$100 What amount of equity was there?

Oct/Nov 2020

Which statement concerning preference shares is incorrect?

Oct/Nov 2020

Z Limited supplied the following information: 5% debentures $\$50\,000$; general reserve $\$25\,000$; issued ordinary share capital $\$300\,000$; retained earnings $\$75\,000$; short-term bank loan $\$10\,000$. What amount of equity was there?

Oct/Nov 2020

Which statement about preference shares is incorrect?

Oct/Nov 2020

JP Limited’s accounting year finished on 30 September 2020. The balances below were available at that date.

Oct/Nov 2020

The directors of DW Limited gave the following figures at 30 September 2020. 6% debentures (2028) $18000 Bank overdraft $6450 Dividend paid $2000 General reserve at 1 October 2019 $6500 Inventory at 30 September 2020 $26300 Issued share capital at 1 October 2019 $200000 Non-current assets at 30 September 2020: Cost $462000, Provision for depreciation $106000 Other payables $2200 Other receivables $1600 Provision for doubtful debts at 1 October 2019 $625 Retained earnings $73475 Trade payables $8250 Trade receivables $14500 Further information: A draft income statement for the year ended 30 September 2020 was drawn up and showed profit of $84900. Errors discovered: 1 Inventory of $26300 included items valued at cost $5200 that needed repair. After repairs costing $600, the items could be sold for $5000. 2 Operating expenses included insurance of $400 that was prepaid at 30 September 2020. 3 The provision for doubtful debts should have been adjusted so that it equals 5% of trade receivables. The directors resolved to transfer $5000 to general reserve. There was no alteration to the issued share capital during the year ended 30 September 2020.

Oct/Nov 2020

BCD Limited gave the information below. ordinary shares $300000 retained earnings $200000 debentures $170000 What are the equity and the capital employed?

Oct/Nov 2021

CD Limited’s issued share capital is made up of ordinary shares. Retained earnings stood at $86000 on 1 September 2020 and at $88500 on 31 August 2021. Over the year, the company earned a profit of $26000 and transferred $5000 to general reserve. What total ordinary share dividend was paid during the year?

Oct/Nov 2021

BCD Limited gave the information shown below. ordinary shares $300000 retained earnings $200000 debentures $170000 What are the amounts of equity and capital employed?

Oct/Nov 2021

CD Limited’s issued share capital is made up of ordinary shares. Retained earnings stood at $86000 on 1 September 2020 and at $88500 on 31 August 2021. During the year, the company earned a profit of $26000 and transferred $5000 to general reserve. What total ordinary share dividend was paid during the year?

Oct/Nov 2021

BCD Limited gave the following information. What were the equity and the capital employed?

Oct/Nov 2021

The issued share capital of CD Limited is made up of ordinary shares. Retained earnings stood at $86000 on 1 September 2020 and at $88500 on 31 August 2021. The company earned a profit of $26000 during the year and transferred $5000 to general reserve. What total ordinary share dividend was paid during the year?

Oct/Nov 2021

Which statement regarding the members of a limited company is correct?

Oct/Nov 2022

A limited company gave the following figures. non-current assets $35\,000 ordinary share capital $40\,000 $5\%$ debentures $10\,000 net current assets $30\,000 What amount of retained earnings was there?

Oct/Nov 2022

A limited company obtained finance by selling ordinary shares, preference shares and debentures. Which of the following statements are true? 1 Debentures form part of loan capital. 2 Ordinary shares belong to the equity. 3 Ordinary dividend is paid before debenture interest is paid. 4 Preference shares provide a fixed rate of dividend.

Oct/Nov 2022

The members of a limited company are only liable up to the amount of the company’s debts they have agreed to cover. What is meant by this?

Oct/Nov 2022

The following figures were given for a limited company. non-current assets $35000 ordinary share capital $40000 5% debentures $10000 net current assets $30000 What amount of retained earnings was there?

Oct/Nov 2022

What does the equity of a limited company consist of?

Oct/Nov 2022

Which statement concerning the members of a limited company is correct?

Oct/Nov 2022

A limited company supplied the following figures. non-current assets $35000$ ordinary share capital $40000$ $5\%$ debentures $10000$ net current assets $30000$ How much were the retained earnings?

Oct/Nov 2022

A limited company obtained finance by issuing ordinary shares, preference shares and debentures. Which of the following statements are correct? 1 Debentures belong to loan capital. 2 Ordinary shares are part of equity. 3 Ordinary dividend is paid before debenture interest. 4 Preference shares have a fixed dividend rate.

Oct/Nov 2022

The information below is taken from C Limited’s statement of financial position at 1 September 2021. 5% Debentures (2024) $60000 Equity: Ordinary share capital ($0.50) $240000; General reserve $36000; Retained earnings $22000. For the year ended 31 August 2022: A final dividend of $12000 was paid for the year ended 31 August 2021. An interim dividend of $0.02 per share was paid for the year ended 31 August 2022. $11000 was transferred to general reserve. At 31 August 2022 the company proposed a final dividend of $10000 for the year ended 31 August 2022. Revenue for the year ended 31 August 2022 was $310000 and profit (before debenture interest) was $23000.

Oct/Nov 2022

The information below is drawn from the statement of financial position of C Limited at 1 September 2021. 5% Debentures (2024) $60000 Equity: Ordinary share capital ($0.50) $240000 General reserve $36000 Retained earnings $22000 In the year ended 31 August 2022: A final dividend payment of $12000 was made for the year ended 31 August 2021. An interim dividend payment of $0.02 per share was made for the year ended 31 August 2022. A transfer of $11000 was made to general reserve. At 31 August 2022 the company proposed a final dividend of $10000 for the year ended 31 August 2022. The revenue for the year ended 31 August 2022 was $310000 and the profit (before debenture interest) was $23000.

Oct/Nov 2022

Which item is directly influenced by the dividend policy of a limited company?

Oct/Nov 2023

What characteristics does a debenture have?

Oct/Nov 2023

Which type of organisation is the hardest to set up and must follow many legal formalities?

Oct/Nov 2023

Z Limited has the following forms of equity and liabilities. 1 debentures 2 general reserves 3 long-term bank loan 4 ordinary share capital 5 preference share capital (non-redeemable) 6 retained earnings Which of these are part of the company’s shareholders’ equity?

Oct/Nov 2023

Which item is directly influenced by the dividend policy of a limited company?

Oct/Nov 2023

What features does a debenture have?

Oct/Nov 2023

B Limited supplies cleaning services to client offices and factories. The clients supply their own cleaning materials. The trial balance of B Limited at 30 June 2023 appears below.

Oct/Nov 2023

Which statement correctly explains the effect of limited liability when a business fails?

Oct/Nov 2024

At the beginning of the year, V Limited’s total equity stood at $45750, including $10750$ in retained earnings. By the end of the year, the company had moved $1000$ into general reserve, distributed a dividend of $2800$ and recorded a profit for the year of $4995$. What was the total equity at the end of the year?

Oct/Nov 2024

X Limited gave the details below: ordinary share capital $300\,000$ general reserve $50\,000$ retained earnings $35\,000$ $8\%$ debenture $60\,000$ What was the amount of equity in total?

Oct/Nov 2024

Which item is included in both the income statement and the statement of changes in equity of a limited company?

Oct/Nov 2024

Which statement accurately explains the effect of limited liability when a business fails?

Oct/Nov 2024

At the beginning of the year, V Limited had $45750$ total equity, with $10750$ of this being retained earnings. By the end of the year, the company had moved $1000$ into general reserve, paid a dividend of $2800$ and recorded a profit for the year of $4995$. What was the total equity at the end of the year?

Oct/Nov 2024

Y Limited is incorporated as a public limited company.

Oct/Nov 2024

BCD Limited gave the following figures. ordinary shares: $300\,000$, retained earnings: $200\,000$, debentures: $170\,000$. What were the equity and the capital employed of BCD Limited?

Oct/Nov 2025

Which statement gives the correct description of called-up share capital?

Oct/Nov 2025

A limited company obtained funds by issuing debentures. Which statement is right?

Oct/Nov 2025

What item is excluded from a statement of changes in equity of a limited company for the year ended 31 March 2025?

Oct/Nov 2025