Choose the correct answer for each question.

1. Two of the following statements about limited companies are correct:

   1. A company can be sued
   2. Shareholders in a company are liable, without restriction, for the company's unpaid bills
   3. A company may have no more than twenty shareholders
   4. A company can be named as a contracting party in legal contracts
      
   Check

2. Two of the following statements about public limited companies (plcs) are true:

   1. plcs must have a share capital of at least £50 000
   2. All plcs are automatically listed on the Stock Exchange
   3. The liability of shareholders in plcs is limited to the amount of their investment
   4. plcs are exempt from the requirement to have annual general meetings
   Check

3. Two of the following statements about share capital are correct:
   

   1. Authorised share capital is always the same amount as issued share capital
   2. The most common type of share capital is preference share capital
   3. Preference share capital carries a fixed rate of dividend
   4. The amount of a company's authorised share capital must be set out in the Memorandum of Association.
   Check

4. Briarfield Bowden Limited has an authorised share capital of £20 000, split into shares of 50p each. Three quarters of the shares are issued. In the year ending 31 March 20X2 a dividend of 2p per share is declared by the company's directors.
   What is the total value of the dividend declared for the year ending 31 March 20X2?

   1. £800
   2. £400
   3. £600
   4. £300
   Check

5. Broome Binks Limited has an authorised share capital of £15 000, split into 25p shares. Two-thirds of the shares are issued. In the year ending 31 August 20X7 a dividend of 60p per share is declared.
   Darius owns 1000 25p shares in Broome Binks Limited.
   What is the value of Darius's dividend for the year ending 31 August 20X7?

   1. £600
   2. £150
   3. £100
   4. £400
   Check

6. Callender and Carstairs plc has both ordinary shares and preference shares in issue, as follows:
   Authorised ordinary share capital 100 000 £1 shares
   Issued ordinary share capital 62 000 £1 shares
   Preference share capital £20 000 8% preference shares
   The directors of the company declare an ordinary dividend of 2% of nominal share value in the year ending 31 March 20X9. The preference dividend is also paid.
   What is the total amount of dividend payable by Callender and Carstairs plc for the year ending 31 March 20X9?

   1. £2 000
   2. £3 600
   3. £2 840
   4. £1 240
   Check

7. Cookham and Chelsea Limited has both ordinary and preference shares in issue, as follows:
   Ordinary share capital 100 000 shares of 50p each have been issued
   Preference share capital £30 000 6% preference shares
   In the year ending 30 April 20X8 the directors decide to pay a dividend of 8p per share. In addition, the preference dividend is paid.
   What is the total amount of dividend payable by Cookham and Chelsea Limited for the year ending 30 April 20X8?

   1. £9 800
   2. £10 400
   3. £5 800
   4. £8 000
   Check

8. Dedman and Darling Limited is a trading company in difficulties. A balance sheet prepared at 31 August 20X6, for the use of the directors only, shows that the company has a negative net assets figure of £18 000. There is little realistic chance of trading improving given the current state of the economy. The directors meet to discuss the company's position and in the course of the meeting the following points are made. Which one of is correct?

   1. We've just got to go on because there's always an outside chance that trading conditions might improve; it's our duty to the shareholders
   2. I think we should cease trading now because if we don't we could be personally liable under the law for the future losses of the company
   3. The thing that concerns me most is my personal reputation; I want it put on the record that I abstained from the vote on whether or not the company should continue - that should protect me from future legal action
   4. Well, on that score I think I'm OK - after all I'm just the marketing director and no-one could reasonably expect me to understand the legalities of the situation
   Check

9. Which three of the following statements about publication of small (as defined in company law) companies' financial information are true?
   

   1. they are not required to file a profit and loss account at Companies House.
   2. they are exempted from filing any financial statements at Companies House.
   3. they have to prepare a full set of company financial statements for their shareholders
   4. they are permitted to present only a balance sheet to shareholders
   5. their accounts at Companies House are available for inspection by any member of the general public
   6. the right of the public to access small companies' accounts at Companies House is highly restricted
      
   Check

10. Which of the following financial statement components is not required by company law?

    1. Profit and loss account
    2. Directors' report
    3. Notes to the accounts
    4. Cash flow statement
    Check