Shareholders' funds (equity) Shareholders' funds (equity) in a company are made up of: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Ordinary share capital plus share premium b Ordinary share capital plus all of the reserves ? Ordinary share capital plus all of the reserves plus long-term loans d Ordinary share capital only depreciation charge Which of the following amounts is the depreciation charge for the second year for machinery, which cost 16,000 with no expected residual value, using the reducing balance method at a rate of 50%, and an anticipated useful life of 4 years. Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 4,000 b 9,000 ? 12,000 d 3,000 gross profit For the year ended 31 December, Fred had sales of 67,990, purchases of 23,965, opening inventory of 7,961 and closing inventory of 8,996. What was Fred's gross profit for the year? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 44,025 b 45,060 ? 53,021 d 43,020 depreciation Ross Ltd bought a machine for 120,000. It has an expected useful life of 5 years and a residual value of 10,000. Using straight line depreciation, how much will the depreciation charge be for each year? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 24,000 b 26,000 ? 110,000 d 22,000 Limited liability means Limited liability means that: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The liability of the shareholders is restricted to the amount of dividends they have received. b The liability of the company is restricted to the amount it owes its shareholders. C ? The liability of the shareholders is unlikely to extend to covering the company's debts. d The liability of a company is restricted to the amount it owes its suppliers and lenders. indirect cost Which is the correct definition of an indirect cost? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a A cost that stays the same with the volume of activity b A cost that can be identified with a specific cost unit ? A cost that cannot be identified with a specific cost unit d A cost that varies with the volume of activity Summer Ltd is preparing a cash budget for their first three months in business, from September to November. Information about their sales receipts is as follows: . 40% of sales receipts will be collected in the month of sale of goods, and these customers receive a 2% discount for prompt payment 50% of sales receipts will be collected the month following the sale of goods, and these customers receive no discount 10% of sales will be bad debts Budgeted sales are 45,000 for September, 27,000 for October and 32,000 for November. What should the budgeted sales receipts figure be for October? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 22,500 b 33,084 ? 33,300 d 10,584 capital investment decisions Which of the following methods used for capital investment decisions uses profits rather than cash flows? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Net present value b Return on capital employed ? Payback period d Accounting rate of return income statement Mourinho Ltd has sold a property in London on the final day of the year ended 30 June 20X8, due to a relocation. The building cost 3,750,000 and was depreciated at 2% on a straight-line basis. Accumulated depreciation as at 30 June 20X7 1,875,000. Sales proceeds were 4,700,000. What profit on disposal of this asset should be recorded in Mourinho's income statement for the year ended 30 June 20X8? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a 2,825,000 b 2,900,000 C ? 4,700,000 d 950,000