A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2014 · Q221 Mark

X Limited and Y Limited both started trading on 1 January 2001. Each year, both businesses had a profit from operations of $20000. On 31 December 2013 retained earnings were as follows: $ X Limited 145000 Y Limited 95000 Which statement explains the difference?

AX Limited has transferred higher amounts to general reserve.

BX Limited pays a higher dividend per share.

CY Limited has fewer shares in issue.

DY Limited has a higher level of debt.

✓ Correct answer

D: Y Limited has a higher level of debt.

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2014 Paper 1 Variant 2, question 22.

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X Limited and Y Limited both started trading on 1 January 2001. Each year, both businesses had a profit from operations of $20000. On 31 December 2013 retained earnings were as follows: $ X Limited 145000 Y Limited 95000 Which statement explains the difference?

✓ Correct answer

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