Question 1

Which one of the following features of debentures is true?

Accepted Answer

A)  Debentures never carry a fixed rate of interest. 
B)  Debenture interest is a not an allowable expense for tax purposes. 
C)  Debentures holders are not usually given any security for their loans. 
D)  Debenture interest has to be paid. 
A)  Debentures never carry a fixed rate of interest. 
B)  Debenture interest is a not an allowable expense for tax purposes. 
C)  Debentures holders are not usually given any security for their loans. 
D)  Debenture interest has to be paid. D

Question 2

Limited liability means that:

Accepted Answer

A)  The liability of a company is restricted to the amount it owes its suppliers and lenders. 
B)  The liability of the shareholders is restricted to the amount of dividends they have received. 
C)  The liability of the company is restricted to the amount it owes its shareholders. 
D)  The liability of the shareholders is restricted to the amount they have invested in the company. 
A)  The liability of a company is restricted to the amount it owes its suppliers and lenders. 
B)  The liability of the shareholders is restricted to the amount of dividends they have received. 
C)  The liability of the company is restricted to the amount it owes its shareholders. 
D)  The liability of the shareholders is restricted to the amount they have invested in the company. D

Question 3

Which of the following is NOT a source of long-term funding for limited companies?

Accepted Answer

A)  Debentures issued. 
B)  Ordinary shares issued. 
C)  Dividends paid. 
D)  Preference shares issued. 
A)  Debentures issued. 
B)  Ordinary shares issued. 
C)  Dividends paid. 
D)  Preference shares issued. C

Question 4

Greta owns 10,000 £1 ordinary shares and 5,000 £1 preference shares in Jing plc. The preference shares pay a 5% dividend. During the year ended 31 December, she received total dividends of £600 from the company. The dividend paid per ordinary share was:

Accepted Answer

A)  12 pence. 
B)  6 pence. 
C)  35 pence. 
D)  3.5 pence. 
A)  12 pence. 
B)  6 pence. 
C)  35 pence. 
D)  3.5 pence.

Question 5

Which one of the following statements regarding preference shares is true?

Accepted Answer

A)  Preference shareholders are usually repaid last, in the event that the company is wound up. 
B)  Preference shares do not usually carry a fixed rate of dividend. 
C)  The preference dividend has to be paid before the ordinary dividend can be paid. 
D)  Preference shareholders usually have the right to vote at company meetings. 
A)  Preference shareholders are usually repaid last, in the event that the company is wound up. 
B)  Preference shares do not usually carry a fixed rate of dividend. 
C)  The preference dividend has to be paid before the ordinary dividend can be paid. 
D)  Preference shareholders usually have the right to vote at company meetings.

Question 6

Which of the following is NOT a benefit of a company obtaining a listing on a stock exchange:

Accepted Answer

A)  It will allow the company to raise new capital. 
B)  It will ensure an increasing value for the company's shares. 
C)  It will enable existing shareholders to sell their shares more easily. 
D)  It will raise the profile of the company. 
A)  It will allow the company to raise new capital. 
B)  It will ensure an increasing value for the company's shares. 
C)  It will enable existing shareholders to sell their shares more easily. 
D)  It will raise the profile of the company.

Question 7

Tash Ltd has issued both ordinary shares and cumulative preference shares. If no dividends are paid for the year ended 31 December 2022, which one of the following statements regarding the company's dividends is true?

Accepted Answer

A)  and 2023 must be paid before any ordinary dividend is paid for 2023. 
B)  The preference dividend for 2023 must be paid before any ordinary dividend is paid for 2023. 
C)  The ordinary dividend for 2023 must be paid before any preference dividend is paid for 2023. 
D)  The ordinary dividend for both 2022 and 2023 must be paid before any preference dividend is paid for 2023. 
A)  and 2023 must be paid before any ordinary dividend is paid for 2023. 
B)  The preference dividend for 2023 must be paid before any ordinary dividend is paid for 2023. 
C)  The ordinary dividend for 2023 must be paid before any preference dividend is paid for 2023. 
D)  The ordinary dividend for both 2022 and 2023 must be paid before any preference dividend is paid for 2023.

Question 8

Which one of the following statements regarding companies is true?

Accepted Answer

A)  Every company must issue ordinary and preference shares. 
B)  Company shareholders are protected by limited liability. 
C)  A company does not have a separate legal identity to its owners. 
D)  The existence of a company is dependent on the continued existence of its shareholders. 
A)  Every company must issue ordinary and preference shares. 
B)  Company shareholders are protected by limited liability. 
C)  A company does not have a separate legal identity to its owners. 
D)  The existence of a company is dependent on the continued existence of its shareholders.

Question 9

The accounts for Mark Ltd for the last financial year show preference dividends paid amounted to £12,000, and ordinary dividends of £30,000 were paid. If the company has issued 4% preference shares of £1 each, how many preference shares have been issued?

Accepted Answer

A)  120,000 
B)  600,000 
C)  300,000 
D)  480,000 
A)  120,000 
B)  600,000 
C)  300,000 
D)  480,000

Question 10

Williams plc has issued 2,000,000 £1 ordinary shares and 1,200,000 5% preference shares of £1 each. If the directors pay an ordinary dividend of 6 pence per ordinary share and the full amount payable to the preference shareholders is paid, which one of the following is true?

Accepted Answer

A)  The ordinary dividend payable would be £120,000 and the preference dividend payable will be £72,000. 
B)  The ordinary dividend payable would be £100,000 and the preference dividend payable will be £72,000. 
C)  The ordinary dividend payable would be £120,000 and the preference dividend payable will be £60,000. 
D)  The ordinary dividend payable would be £100,000 and the preference dividend payable will be £60,000. 
A)  The ordinary dividend payable would be £120,000 and the preference dividend payable will be £72,000. 
B)  The ordinary dividend payable would be £100,000 and the preference dividend payable will be £72,000. 
C)  The ordinary dividend payable would be £120,000 and the preference dividend payable will be £60,000. 
D)  The ordinary dividend payable would be £100,000 and the preference dividend payable will be £60,000.

Which one of the following features of debentures is true?

Limited liability means that:

Which of the following is NOT a source of long-term funding for limited companies?

Greta owns 10,000 £1 ordinary shares and 5,000 £1 preference shares in Jing plc. The preference shares pay a 5% dividend. During the year ended 31 December, she received total dividends of £600 from the company. The dividend paid per ordinary share was:

Which one of the following statements regarding preference shares is true?

Which of the following is NOT a benefit of a company obtaining a listing on a stock exchange:

Tash Ltd has issued both ordinary shares and cumulative preference shares. If no dividends are paid for the year ended 31 December 2022, which one of the following statements regarding the company's dividends is true?

Which one of the following statements regarding companies is true?

The accounts for Mark Ltd for the last financial year show preference dividends paid amounted to £12,000, and ordinary dividends of £30,000 were paid. If the company has issued 4% preference shares of £1 each, how many preference shares have been issued?

Williams plc has issued 2,000,000 £1 ordinary shares and 1,200,000 5% preference shares of £1 each. If the directors pay an ordinary dividend of 6 pence per ordinary share and the full amount payable to the preference shareholders is paid, which one of the following is true?

The Cash Budget

Introduction to the Statement of Profit or Loss

Balancing the Basics

Accounting for Depreciation and Bad Debts

Company Accounts

The Statement of Cash Flows

Interpreting Financial Statements

Capital Structure and Investment Ratios

Costs and Break-Even Analysis

Absorption and Activity-Based Costing

Budgeting

Pricing and Costs

Short-Term Decision Making

Investment Appraisal Techniques

Measuring and Reporting Performance

Double-Entry Bookkeeping I

Double-Entry Bookkeeping II

Filters

Exam 5: Company Finance

Which one of the following features of debentures is true?

Limited liability means that:

Which of the following is NOT a source of long-term funding for limited companies?

Greta owns 10,000 £1 ordinary shares and 5,000 £1 preference shares in Jing plc. The preference shares pay a 5% dividend. During the year ended 31 December, she received total dividends of £600 from the company. The dividend paid per ordinary share was:

Which one of the following statements regarding preference shares is true?

Which of the following is NOT a benefit of a company obtaining a listing on a stock exchange:

Tash Ltd has issued both ordinary shares and cumulative preference shares. If no dividends are paid for the year ended 31 December 2022, which one of the following statements regarding the company's dividends is true?

Which one of the following statements regarding companies is true?

The accounts for Mark Ltd for the last financial year show preference dividends paid amounted to £12,000, and ordinary dividends of £30,000 were paid. If the company has issued 4% preference shares of £1 each, how many preference shares have been issued?

Williams plc has issued 2,000,000 £1 ordinary shares and 1,200,000 5% preference shares of £1 each. If the directors pay an ordinary dividend of 6 pence per ordinary share and the full amount payable to the preference shareholders is paid, which one of the following is true?

The Cash Budget

Introduction to the Statement of Profit or Loss

Balancing the Basics

Accounting for Depreciation and Bad Debts

Company Accounts

The Statement of Cash Flows

Interpreting Financial Statements

Capital Structure and Investment Ratios

Costs and Break-Even Analysis

Absorption and Activity-Based Costing

Budgeting

Pricing and Costs

Short-Term Decision Making

Investment Appraisal Techniques

Measuring and Reporting Performance

Double-Entry Bookkeeping I

Double-Entry Bookkeeping II

Filters