Financial accounting worksheet with answers

Under the cash basis of accounting, income and expenses are recorded when:

1. ACash is received or paid
2. BThe invoice is approved by the board
3. CThe goods are ordered
4. DThe financial year ends

Accounts payable (trade payables) are:

1. AAmounts the business owes suppliers for purchases on credit
2. BAmounts customers owe the business
3. CCash held in the bank account
4. DProfits paid out to shareholders

A budget is:

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

A machine with a carrying amount of €3,000 is sold for €4,000. What is recorded in the income statement?

1. AA loss on disposal of €1,000
2. BA gain on disposal of €1,000
3. CRevenue of €4,000
4. DA gain on disposal of €4,000

The prudence (conservatism) concept suggests that accountants should:

1. AValue assets at their selling price
2. BAvoid overstating assets and income under uncertainty
3. CIgnore possible losses
4. DAlways record the highest possible profit to attract investors

On 1 October a company pays €12,000 rent for the next 12 months. Its year ends on 31 December. What is the rent expense for this year?

1. A€1,000
2. B€12,000
3. C€3,000
4. D€9,000

An asset has a carrying amount of €500,000, fair value less costs of disposal of €380,000 and value in use of €420,000. What impairment loss is recognised?

1. A€120,000
2. B€80,000
3. C€200,000
4. D€0

Under IFRS 16, a lessee typically recognises a lease on the balance sheet as:

1. ARevenue and inventory
2. BA right-of-use asset and a lease liability
3. CAn operating expense only, spread evenly over the lease term
4. DEquity and a provision