Introduction to Company Accounts
Accounts · 50 practice questions
Formation and classification of companies; issue of shares and debentures; final accounts of companies; accounting ratios; the distinction between capital and revenue reserves.
- Differentiate between types of companies.
- Identify the procedures for treating the issue of shares and debentures.
- Compute the elements of a company's final accounts.
- Compute and interpret accounting ratios such as current, acid test and stock turnover ratios.
Try a few questions
- Practice question 1
A company's board of directors specifically is responsible for the overall management and strategic direction of the company on behalf of
- A.a single, specific government regulatory agency exclusively
- B.only the company's own debenture holders, rather than its shareholders
- C.shareholders
- D.a factor entirely unrelated to shareholders of any kind
Show the answer
C. shareholders
A company's board of directors specifically is responsible for overall management and strategic direction on behalf of shareholders.
- Practice question 2
A company's gearing involves debentures of ₦300,000 and ordinary share capital of ₦600,000. The gearing ratio (debt to equity) is
- A.3:6
- B.1:2
- C.1:1
- D.2:1
Show the answer
B. 1:2
Gearing ratio = debentures / ordinary share capital = 300,000/600,000 = 1:2.
- Practice question 3
Underwriting commission, paid to parties guaranteeing the sale of a share issue, specifically is a cost associated with
- A.paying an existing, ordinary cash dividend to shareholders
- B.a factor entirely unrelated to raising new share capital of any kind
- C.no particular cost of any kind, despite being formally paid
- D.raising new share capital
Show the answer
D. raising new share capital
Underwriting commission, paid to parties guaranteeing a share issue, specifically is a cost associated with raising new share capital.
More UTME Accounts topics
- Nature and Significance of Bookkeeping and Accounting
- Principles of Double Entry
- Ethics in Accounting
- Cash Book
- Bank Transactions and Reconciliation Statements
- Final Accounts of a Sole Trader
- Stock Valuation
- Control Accounts and Self-Balancing Ledgers
- Incomplete Records and Single Entry
- Manufacturing Accounts
- Accounts of Not-For-Profit-Making Organizations
- Departmental Accounts
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