Back to: Financial Accounting
Revision Questions
(Company Basics)
- What are the main differences between a private limited company and a public limited company?
Define the following:
- Authorised capital
- Issued capital
- Paid-up capital
- Explain the difference between ordinary shares and preference shares.
- Why might a company choose to retain some of its earnings instead of paying them all as dividends?
- What are the roles of the board of directors in financial management?
Revision Questions – (Financial Statements)
What is the purpose of the statement of profit or loss?
List three items that would appear under “Operating Expenses.”
In the balance sheet, where would you classify:
Equipment
Bank overdrafts
Retained earnings
A company has the following:
Revenue: N3,000,000
Cost of Sales: N1,800,000
Admin expenses: N400,000
Interest: N100,000
Tax: N200,000
Final Dividend: N150,000
Calculate:
Gross Profit
Profit Before Tax
Profit After Tax
Retained Earnings
- Why is it important for companies to prepare financial statements using a standard format?