Limited Companies Quiz

Auditors of a limited company are appointed by which of the following?

• Directors

• Shareholders

• The company's bank

• Debenture holders

• The Company Solicitor

Stakeholders are which of the following?

• Directors

• Shareholders

• Customers

• Debenture holders

• All of the above

The following information has been extracted from a company’s Statement of Financial Position

 

Ordinary share capital: £100,000

Retained earnings: £40,600

Long term loan: £32,800

Provision for deprecation: £16,100

Share premium account: £8,000

Revaluation reserve: £15,000

Current liabilities: £28,000

Dividends payable: £10,000

 

What is the equity of the company?

• £163,600

• £181,400

• £127,000

• £148,600

• £108,000

A public limited company differs from a private limited company in that:

• Its shares can be offered to the general public

• It is a separate legal entity

• It must have issued share capital of £500,000 ordinary shares

• Its shares must have a nominal value of £1

• Directors are appointed to manage the company on behalf of the shareholders

The word "limited" in relation to a limited company means which of the following:

• The liability of the company is limited to the value of its issued share capital

• The number of shares an investor may purchase is limited by the rules of the company

• The liability of the shareholders is limited to the amount they have invested in the shares of the company

• The liability of the company is limited by the insurances it purchases

• The number of shares the company may issue is limited by the sales of the company

Caly and Co Limited started trading as a limited company and have issued 400,000 ordinary shares at nominal value of £1 and at a premium of 50 pence each.

Which of the following is the correct transaction to record the accounting entry?

• Dr Bank: £400,000,

  Cr Share capital: £400,000

• Dr Bank: £600,000,

  Cr Share capital: £600,000

• Dr Bank: £600,000

  Cr Share premium: £600,000

• Dr Bank: £600,000,

  Cr Share capital: £400,000

  Cr Share premium: £200,000

• Dr Share capital: £400,00

  Cr Share capital: £200,000

  Cr Share premium: £600,000

Which of the following is a feature of preferences shares?

• They carry no automatic right to a dividend

• They receive dividends after ordinary shareholders

• They carry more risk than ordinary shares

• They carry an automatic right to a set dividend

• The dividend varies annually

An extract from the Statement of Financial Position of Platt & Co. Ltd. shows the following values.

Net Assets: £600,000

Ordinary Shares capital £1: £200,000

Preference shares capital £1: £100,000

Retained Earnings : £300,000

Total Equity: £600,000

The company has decided to issue free share to existing ordinary shareholders, one ordinary share for every four ordinary shares held. After the adjustments have been made, the Statement of Financial Position extract will appear as:

• Ordinary share capital: £250,000, Preference share capital: £100,000, Retained earnings: £250,000

• Ordinary share capital: £285,000, Preference share capital: £175,000, Retained earnings: £225,000

• Ordinary share capital: £250,000, Preference share capital: £125,000, Retained earnings: £225,000

• Ordinary share capital: £250,000, Preference share capital: £100,000, Retained earnings: £225,000

• Ordinary share capital: £275,000, Preference share capital: £25,000, Retained earnings: £300,000

Stone Ltd issues 200,000 ordinary shares with a nominal value of £1 and at a premium of 50p per share. The total amount allocated to share capital and share premium in the Statement of Financial Position will be:-

• Share Capital: £375,000, Share Premium: £100,000

• Share Capital: £300,000, Share Premium: £125,000

• Share Capital: £250,000, Share Premium: £125,000

• Share Capital: £200,000, Share Premium: £300,000

• Share Capital: £200,000, Share Premium: £100,000

XY Ltd has decided to issue 400,000 ordinary shares at a premium of 25p per share.  The nominal value of each ordinary share is 50p.  The amount of money raised by the issue will be:-

• £200,000

• £300,000

• £500,000

• £450,000

• £325,000