OxfordAQA A-Level Accounting: Accounting for limited companies (9615) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

This set covers section 3.2.6, Accounting for limited companies, of the OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards. Every part of it is International A-level only, and it appears in the assessment overview for Paper 3 as well as Paper 4. All figures are invented, in dollars.

Study the topic first in the study guide. The AS statements are practised in the limited company accounts questions. Links: course hub · printable checklist · free diagnostic.

Questions

1. During the year Velmont Lighting plc made a 1 for 5 bonus issue, revalued its warehouse upwards, repaid a bank loan, and received cash from a rights issue. For each event, state whether it appears in the statement of cash flows, giving its heading or the reason it is left out. [4]

2. Corvelle Robotics plc has 1,200,000 ordinary shares of 0.20 each in issue. It makes a 2 for 5 rights issue at 0.55 per share, and every share offered is bought. Find the new shares issued, the cash raised and the amount credited to share premium. [3]

3. Kittering Bakeries Ltd’s equity is: 750,000 ordinary shares of 0.40 each, 300,000; share premium 52,000; retained earnings 214,000. The directors make a 1 for 3 bonus issue, using all of the share premium and taking the rest from retained earnings. Calculate each equity balance after the issue, and show that total equity is unchanged. [4]

4. Strathmere Freight Ltd prepares accounts to 31 March. Its office building cost 420,000 and is depreciated at 2.5% a year on cost (a 40-year life). At 1 April 2025 accumulated depreciation was 94,500. On 31 March 2026, after charging the year’s depreciation, the building was revalued at 465,000.

(a) Calculate the revaluation surplus. [3] (b) Prepare the journal entry to record the revaluation (narrative not required). [3] (c) Calculate the depreciation charge for the year ending 31 March 2027. [2]

5. For the year, Gorsewick Paints Ltd’s tax charge was 27,450. Tax payable was 23,600 at the start of the year and 26,050 at the end. It had 6% debentures of 150,000 throughout the year; interest owing was 3,000 at the start and 1,500 at the end. Work out how much tax and how much debenture interest the company paid in the year. [4]

6. Ravensclough Hire Ltd: non-current assets at 1 April 2025.

	Cost	Accumulated depreciation
Fixtures	64,000	25,600
Vehicles	118,000	47,200

In the year to 31 March 2026: fixtures bought 12,000; a vehicle bought 26,000; a vehicle that cost 30,000 (accumulated depreciation 21,600) sold for 9,900. Depreciation on assets held at the year end: fixtures 10% on cost; vehicles 30% reducing balance.

(a) Calculate the profit or loss on the vehicle sold. [2] (b) Prepare Ravensclough’s schedule of non-current assets for its year to 31 March 2026. [8]

7. Quillan Metalworks Ltd: information for the year ended 30 September 2026.

• Profit before tax 112,400, after finance costs 9,600, depreciation 41,500 and a loss on disposal 3,200.
• Inventory rose from 66,800 to 74,300; trade receivables fell from 59,100 to 53,400; trade payables rose from 41,200 to 45,950.
• Interest owing: 1,600 at the start, 2,400 at the end. Tax charge 26,700; tax payable 21,900 at the start, 25,100 at the end.
• Non-current assets bought for 184,000; disposal proceeds 11,600.
• 8% debentures of 60,000 issued; a rights issue raised 45,000; a bonus issue of 80,000 was made from share premium; dividends paid 36,000.
• Cash and cash equivalents at 1 October 2025: an overdraft of 18,450.

Prepare Quillan’s statement of cash flows for its year to 30 September 2026, using the IAS7 indirect method. [12]

8. Tavistone Glazing Ltd’s machinery at cost was 210,000 at the start of the year and 262,000 at the end. Machinery costing 35,000 was sold during the year. Retained earnings were 143,000 at the start and 171,500 at the end; profit after tax was 64,500, and 20,000 of retained earnings was used for a bonus issue. Calculate the machinery purchased and the dividends paid. [4]

9. Marrabel Foods plc’s annual report includes notes to the accounts, a strategic report and an auditor’s report. For each, state whether IAS1 or the Companies Acts requires it, and its purpose. [6]

10. Marrabel plans to buy a supplier based in another country. Explain how the international accounting standards framework helps its directors study the supplier’s accounts. [4]

11. Before applying for a large bank loan, the directors of Harlowmead Furniture Ltd plan to revalue the premises upwards by 240,000, then make a 1 for 2 bonus issue from the revaluation reserve. One director says this “will make the company look far stronger to the bank”. Evaluate this view. [12]

Answers

1. Bonus issue: not shown, no cash [1]. Revaluation: not shown, no cash [1]. Loan repayment: financing, outflow [1]. Rights issue: financing, inflow [1]. [4] Examiner insight: For the non-cash events, a bare “none” omits the reason the question asks for.

2. New shares 1,200,000 x 2/5 = 480,000 [1]. Cash 480,000 x 0.55 = 264,000 [1]. Share premium 480,000 x (0.55 - 0.20) = 168,000 [1]. [3] Examiner insight: Writing 0.35 as the premium on each share makes your split of the 264,000 clear.

3. New shares 750,000 / 3 = 250,000; value 250,000 x 0.40 = 100,000 [1]. From retained earnings 100,000 - 52,000 = 48,000 [1]. After: share capital 400,000; share premium nil; retained earnings 214,000 - 48,000 = 166,000 [1]. Total 300,000 + 52,000 + 214,000 = 566,000 before and 400,000 + 166,000 = 566,000 after [1]. [4] Examiner insight: Finish with the before-and-after totals; that check is what the question asks you to show.

4. (a) Year’s depreciation 2.5% x 420,000 = 10,500 [1]. Carrying amount 420,000 - (94,500 + 10,500) = 315,000 [1]. Surplus 465,000 - 315,000 = 150,000 [1]. (b) Dr Office building 45,000 [1]; Dr Accumulated depreciation 105,000 [1]; Cr Revaluation reserve 150,000 [1]. (c) Years used 105,000 / 10,500 = 10, so 30 years remain [1]. 465,000 / 30 = 15,500 [1]. [8] Examiner insight: Charge the current year’s depreciation before revaluing; skipping it understates the surplus by 10,500.

5. Tax paid 23,600 + 27,450 - 26,050 [1] = 25,000 [1]. Interest charge 6% x 150,000 = 9,000; paid 3,000 + 9,000 - 1,500 [1] = 10,500 [1]. [4] Examiner insight: Write the formula line with figures in it; a wrong bare figure shows no method at all.

6. (a) Carrying amount 30,000 - 21,600 = 8,400 [1]. Proceeds 9,900, so profit 1,500 [1]. (b)

	Fixtures	Vehicles	Total
Cost at 1 April 2025	64,000	118,000	182,000
Additions	12,000	26,000	38,000
Disposals	–	(30,000)	(30,000)
Cost at 31 March 2026	76,000 [1]	114,000 [1]	190,000
Depreciation at 1 April 2025	25,600	47,200	72,800
Charge for the year	7,600 [1]	26,520 [1]	34,120
Disposals	–	(21,600) [1]	(21,600)
Depreciation at 31 March 2026	33,200	52,120 [1]	85,320
Carrying amount at 1 April 2025	38,400	70,800 [1]	109,200
Carrying amount at 31 March 2026	42,800	61,880	104,680 [1]

Workings: 10% x 76,000 = 7,600; 30% x (114,000 - 25,600) = 26,520. [10] Examiner insight: Remove the sold vehicle’s depreciation before applying the reducing-balance rate.

7.

Quillan Metalworks Ltd -- Statement of cash flows, year ended 30 September 2026
Cash flows from operating activities
Profit before tax                                    112,400
Adjustments for:
  Finance costs                                        9,600  [1]
  Depreciation                                        41,500
  Loss on disposal                                     3,200  [1]
  Increase in inventories                             (7,500) [1]
  Decrease in trade receivables                        5,700  [1]
  Increase in trade payables                           4,750  [1]
Cash generated from operations                       169,650  [1]
  Interest paid                                       (8,800) [1]
  Tax paid                                           (23,500) [1]
Net cash from operating activities                   137,350  [1]
Cash flows from investing activities
  Payments for non-current assets      (184,000)
  Proceeds from disposal                 11,600
Net cash used in investing activities               (172,400) [1]
Cash flows from financing activities
  Issue of debentures                    60,000
  Rights issue                           45,000
  Dividends paid                        (36,000)
Net cash from financing activities                    69,000  [1]
Net increase in cash and cash equivalents             33,950
Cash and cash equivalents at 1 October 2025          (18,450)
Cash and cash equivalents at 30 September 2026        15,500  [1]

Interest paid 1,600 + 9,600 - 2,400 = 8,800. Tax paid 21,900 + 26,700 - 25,100 = 23,500. The bonus issue is left out. [12] Examiner insight: Enter the opening overdraft as a negative, or the closing figure is wrong.

8. Purchases 262,000 - 210,000 + 35,000 [1] = 87,000 [1]. Dividends 143,000 + 64,500 - 20,000 - 171,500 [1] = 16,000 [1]. [4] Examiner insight: Ignoring the bonus issue gives dividends of 36,000.

9. Notes: IAS1 [1]; set out accounting policies and break down the main figures [1]. Strategic report: Companies Acts [1]; a fair review of the business and its principal risks and uncertainties [1]. Auditor’s report: Companies Acts [1]; an independent opinion on whether the accounts show a true and fair view [1]. [6] Examiner insight: Pair each source with a purpose; naming the regulation alone answers half the question.

10. The framework sets common rules for measuring and presenting items [1], so the supplier’s figures are prepared on the same basis as Marrabel’s and can be compared directly [1]. Fewer permitted choices limit misleading presentation [1], so the directors can rely more on the figures when deciding a price [1]. [4] Examiner insight: Link each point to the directors’ decision; generic benefits are weaker.

11. For: the revaluation adds 240,000 to non-current assets and equity [1], showing more security for a loan [1]. Higher equity makes debt a smaller share of total finance [1], which may reassure the bank about gearing [1].

Against: neither step raises cash [1], so liquidity is unchanged [1]. The bonus issue only moves reserves into share capital [1]; total equity is unchanged, so it adds no strength [1]. Higher depreciation on the new value cuts future profit [1], and return on capital employed falls as capital employed grows [1]. A bank will study cash flows, profit and interest cover, and may get its own valuation [1].

Judgement: the revaluation shows security but no cash; the bonus issue is cosmetic; the claim is overstated [1]. [12] Examiner insight: Evaluation needs both sides, applied to the bank, and a reasoned final judgement.

Where marks are usually lost

• Using the share count from before an earlier issue.
• Crediting all the cash from a rights issue to share capital.
• Measuring a surplus from cost, or leaving old depreciation on a revalued asset.
• Adding back disposal proceeds in operating activities.
• Using the tax or interest charge as the cash paid.
• Including a bonus issue in financing activities.
• Naming published-accounts elements without their purpose.

Next steps

• Revision notes
• Study guide
• Course hub
• Printable checklist
• All free 10-minute diagnostics
• Book a free trial class

Official syllabus

OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards, published by OxfordAQA – section 3.2.6, Accounting for limited companies.