Financial accounting worksheet with answers

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

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

Which financial statement shows a company's financial position at one moment in time?

1. AThe income statement
2. BThe cash flow statement
3. CThe statement of changes in equity over the year
4. DThe balance sheet

Opportunity cost is:

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

Under IAS 38, how are research and development costs treated?

1. AResearch is expensed; development is capitalised only when strict criteria are met
2. BResearch is capitalised; development is expensed
3. CBoth are always capitalised as intangible assets
4. DBoth are always expensed immediately

Which inventory valuation method assumes the oldest goods are sold first?

1. ALIFO (last in, first out)
2. BWeighted average cost
3. CSpecific identification of each item
4. DFIFO (first in, first out)

Current assets are €300,000, including inventory of €100,000. Current liabilities are €200,000. What is the quick (acid-test) ratio?

1. A1.0
2. B0.5
3. C2.0
4. D1.5

Budgeted overhead is €200,000 for 40,000 machine hours. Actual hours are 42,000 and actual overhead is €205,000. What is the result?

1. AOverhead under-absorbed by €10,000
2. BOverhead under-absorbed by €5,000
3. COverhead over-absorbed by €5,000
4. DOverhead exactly absorbed

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€200,000
3. C€0
4. D€80,000