Financial accounting worksheet with answers

Opportunity cost is:

1. AThe total of all past costs
2. BThe value of the best alternative given up
3. CThe cash cost of buying into a new opportunity
4. DThe interest paid on a loan

A budget is:

1. AA financial plan for a future period
2. BA record of last year's transactions
3. CA list of the company's shareholders
4. DA report written by the external auditor

Revenue minus all expenses equals:

1. AGross profit, before operating expenses
2. BCash flow
3. CNet profit (or loss)
4. DEquity

Revenue is €200,000 and cost of sales is €140,000. What is the gross profit margin?

1. A60%
2. B30%
3. C70%
4. D43%

Current assets are €300,000 and current liabilities are €150,000. What is the current ratio?

1. A4.5
2. B2.0
3. C0.5
4. D1.5

An item cost €80. It can be sold for €90, but €20 must be spent to sell it. At what amount is it shown in inventory?

1. A€60
2. B€80
3. C€70
4. D€90

Goodwill arises in a business combination when:

1. AA company has a good reputation
2. BAssets are revalued upwards
3. CThe acquired company makes a loss
4. DThe consideration paid exceeds the fair value of identifiable net assets acquired

Operating profit is €200,000 and capital employed (equity plus non-current liabilities) is €1,000,000. What is ROCE?

1. A5%
2. B2%
3. C50%
4. D20%