Financial accounting worksheet with answers

Dividends paid to shareholders are recorded as:

1. AA reduction of retained earnings in equity
2. BRevenue of the shareholders' company
3. CAn expense in the income statement for the year
4. DA non-current liability once paid

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

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

Which of these is a current asset?

1. ALand
2. BMachinery
3. CInventory
4. DA long-term bank loan

Which error will NOT be revealed by a trial balance?

1. AA sale left out of the books entirely
2. BA wrongly added ledger column
3. CA debit posted without a matching credit
4. DA balance copied to the wrong column

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

1. A60%
2. B70%
3. C43%
4. D30%

Budgeted sales are 1,500 units and the break-even point is 1,000 units. What is the margin of safety?

1. A1,000 units
2. B2,500 units
3. C1,500 units
4. D500 units

Under the IAS 16 revaluation model, a building is revalued upwards for the first time. Where does the gain go?

1. ATo other comprehensive income and a revaluation surplus in equity
2. BTo revenue in the income statement
3. CTo a provision on the balance sheet
4. DTo retained earnings as a realised profit

A firm has a net profit margin of 5%, asset turnover of 2 and an equity multiplier (assets ÷ equity) of 1.5. Using the DuPont analysis, what is ROE?

1. A8.5%
2. B7.5%
3. C10%
4. D15%