Senior Secondary (HKDSE) · Business, Accounting and Financial Studies

Accounting for limited company: Practice Questions

5 multiple-choice questions marked as you go, and 3 written questions with worked solutions. All on Accounting for limited company.

8 questions11 marksFree, no account

Question 1

1 mark

Which of the following describes the nature of debentures in a limited company?

Question 2

1 mark

Which of the following items is usually found in the appropriation account of a limited company?

Question 3

1 mark

A company issues \(2,000,000\) ordinary shares at no par value. All shares were fully paid on application. However, applications for \(2,400,000\) shares were received. The company allotted the shares and refunded the excess money. What is the journal entry to record the allotment of shares from the application account?

Question 4

1 mark

A limited company issued \(500,000\) ordinary shares. Applications were received for \(650,000\) shares, and the company decided to refund the excess application money for the unallotted shares. Which of the following accounts should be debited to record the refund of the excess application money?

Question 5

1 mark

Which of the following statements regarding the issue of debentures at par is correct?

Question 6

2 marks

State the nature of debentures and the classification of debenture interest in the financial statements.

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Question 7

2 marks

State the effect of a transfer of profits to a general reserve on the total equity of a limited company.

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Question 8

2 marks

State the purpose of preparing an appropriation account for a limited company.

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