Financial accounting worksheet with answers

Free printable Financial accounting worksheet: 8 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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1.Easy

A bad debt is:

  1. AA receivable that the company does not expect to collect
  2. BA loan with a high interest rate
  3. CA debt owed to a supplier that is overdue
  4. DAny loan taken out by a company that is currently making losses
2.Easy

In double-entry bookkeeping, an increase in an asset account is recorded as:

  1. AA debit to equity
  2. BA credit to revenue only
  3. CA debit
  4. DA credit
3.Easy

What is the main purpose of an external audit?

  1. ATo decide the company's dividend policy
  2. BTo give an independent opinion on whether the financial statements give a true and fair view
  3. CTo prepare the company's financial statements
  4. DTo guarantee that no fraud has happened
4.Medium

Trade receivables are €50,000 and annual credit sales are €365,000. What are the receivable days?

  1. A73 days
  2. B7.3 days
  3. C36.5 days
  4. D50 days
5.Medium

A project costs €100,000 and brings in €25,000 cash per year. What is its payback period?

  1. A2.5 years
  2. B5 years
  3. C4 years
  4. D25 years
6.Medium

Profit for ordinary shareholders is €500,000 and there are 1,000,000 ordinary shares. What are basic earnings per share?

  1. A€0.50
  2. B€5.00
  3. C€2.00
  4. D€0.05
7.Hard

A company switches to a depreciation method that gives higher charges. Ignoring tax, what happens to cash flow?

  1. ACash flow and profit both rise
  2. BCash flow is unchanged, although profit falls
  3. CCash flow falls by the amount of the extra depreciation
  4. DCash flow rises by the extra depreciation
8.Hard

A firm has spent €50,000 on market research for a new product and must decide whether to launch it. How should the €50,000 be treated in the decision?

  1. ADeducted from expected sales
  2. BIgnored, because it is a sunk cost
  3. CAdded to the launch cost
  4. DSpread over the product's expected life

Answer key

  1. 1. A · A receivable that the company does not expect to collect
  2. 2. C · A debit
  3. 3. B · To give an independent opinion on whether the financial statements give a true and fair view
  4. 4. D · 50 days
  5. 5. C · 4 years
  6. 6. A · €0.50
  7. 7. B · Cash flow is unchanged, although profit falls
  8. 8. B · Ignored, because it is a sunk cost

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