Financial accounting worksheet with answers

Which of these is an intangible asset?

1. AA delivery van
2. BCash in the bank
3. CA patent
4. DInventory of finished goods

A customer pays in advance for services the company will provide next year. At year end the money is shown as:

1. AA non-current asset
2. BAn expense of this year
3. CA liability (deferred revenue)
4. DRevenue of this year (cash received)

A variable cost is a cost that:

1. AChanges in total in proportion to the level of activity
2. BIs paid only once when a business starts
3. CStays the same in total within the relevant range of output
4. DIs never included in product costs

Net working capital is:

1. ACurrent assets minus current liabilities
2. BNon-current assets minus long-term loans
3. CTotal assets minus total liabilities
4. DRevenue minus operating expenses

Which costs are relevant when making a business decision?

1. AAllocated fixed overheads that do not change with the decision
2. BFuture cash flows that differ between the alternatives
3. CCosts already paid for the project
4. DAll costs in last year's income statement

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

1. A1.5
2. B2.0
3. C0.5
4. D4.5

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

1. A50%
2. B20%
3. C2%
4. D5%

Closing inventory this year is overstated by €10,000 by mistake. What is the effect on profit, if not corrected?

1. AThis year's profit is overstated and next year's understated by €10,000
2. BBoth years' profits are overstated
3. CProfit is unaffected; only the balance sheet changes
4. DOnly this year's profit is understated