What this practice covers
These questions are drawn from past CIE 9706 Accounting papers and filtered to limited companies. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
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What examiners see students get wrong here
These are the errors that cost marks on limited companies, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Treating dividends as an expense in the income statement.
- Treating debenture interest or directors' fees as an appropriation. Both are expenses.
- Showing share capital at issue price rather than nominal value.
- Saying a bonus issue raises cash, or that it increases total equity.
- Paying a dividend out of share premium or the revaluation reserve.
- Recognising a proposed final dividend as a current liability.
- Saying a transfer to general reserve reduces the profit for the year.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Limited companies revision notes.