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WorksheetsHigher Accounting - Company Accounts Theory (plc)
Total questions: 20
Worksheet time: 10mins
Which of the following features does NOT relate to a Private Limited Company (Ltd)?
Does not sell shares to the public - invited shareholders only
Shareholders have limited liability - they cannot lose more than the amount of money they have invested
Usually owned by only a few people (shareholders), usually family and friends
Shares in an Ltd company are available to purchase on stock market
Which of the following are advantages of a Private Limited Company (Ltd)? - Choose THREE answers
Shareholders have limited liability
Control of the company is not lost to outsiders
Profits are shared amongst all shareholders
More finance can be raised from shareholders and lenders should the business require additional equity
Which THREE of the following features relate to a Public Limited Company (plc)?
Shares are offered to the general public for sale through the stock exchange
Run by a Board of Directors who are elected at the Annual General Meeting on behalf of shareholders
Accounts must be lodged with Registrar of Public Companies and are published
Shareholders must be invited personally by Board of Directors
Which of the following is NOT a disadvantage of a Public Limited Company (plc)?
Strictly must obide by the Companies Act
Have no control over who purchases shares
Must make annual accounts publically available
Set up costs are high
Shareholders have limited liability
Which TWO documents must a plc lodge with Registrar of Companies to form?
Memorandum of Declaration
Memorandum of Association
Articles of Companies
Articles of Association
Which of the following is NOT a source of finance for a plc?
Issuing shares
Debentures
Grants
Venture Capital
Loan from family and friends
Dividends are a share of organisational profits paid to shareholders.
True
False
Dividends paid out at the end of the year are called...
Eventual dividends
Final dividends
Interim dividends
End dividends
Dividends paid during the financial year (usually 6-monthly) are called...
Final dividends
Inter dividends
Interim dividends
Regular dividends
Which of the following is NOT a feature of an ordinary dividend?
Most common type of share
No fixed rate of dividend - depends on profit earned that year
Receive dividend before preference shareholders have been paid
Have voting rights at AGM
Which of the following is NOT a feature of a preference share?
Agreed rate of dividend irrespective of profit earned
Receive their dividend before ordinary shareholders
Have priority in the event of liquidation
Have voting rights at AGM
Which of the following terms has this definition:
Shares which are given to existing shareholders without requiring further payment. Reserves are used to finance this.
Bonus Share
Ordinary Share
Preference Share
Dividend
Which of the following is NOT a feature of a debenture?
A long term loan obtained by a company
Debenture holders have no voting rights
Receive a fixed rate of interest annually
Doesn't actually need to be paid back if company choose
Venture Capital is investment in a business, rather than a loan. The investor expects a high rate of return due to the risks involved.
Which of the following TV shows revolves around the provision of venture capital funding?
The Apprentice
Undercover Boss
Inside the Factory
Dragons Den
Which of the following is NOT a feature of a grant?
Provides finance which must be repaid in 12-24 months
Often from the government or other organisation such as Princes Trust
Tends to only be a one-off payment
Often provided for a specific purpose
Which of the following terms has this definition:
When shares are sold for more than their face (nominal) value, this is the extra amount (e.g. if a £1 share was sold for £1.50, the extra 50p has this name)
Preliminary Expenses
Bonus Share
Share Premium
Dividend
Which of the following terms has this definition:
Legal and other expenses (printing, services of underwriters) that are incurred when a company is formed. They can be written off against any balance on Share Premium.
Share Premium
Goodwill
Preliminary Expenses
Bonus Shares
Which of the following sources of finance is described below?
Issuing shares where a fixed dividend is received in return for investing in the company
Preferred Shares
Ordinary Shares
Debentures
Preference Shares
Which of the following sources of finance is described below:
Selling shares in return for a share of the profits in the form of a variable dividend. A successful year means high dividend/poor year no or low dividend
Preference Share
Ordinance Share
Debenture
Ordinary Share
Which of the following sources of finance is described below:
Issue of a loan with fixed annual interest
Debenture
Ordinary Share
Venture Capital
Grant
