Financial accounting worksheet with answers

The systematic allocation of the cost of an intangible asset over its useful life is called:

1. AAccrual
2. BRevaluation
3. CAmortisation
4. DDepreciation of land

Which body issues International Financial Reporting Standards (IFRS)?

1. AThe International Monetary Fund (IMF)
2. BThe International Accounting Standards Board (IASB)
3. CThe European Central Bank (ECB)
4. DThe World Trade Organization (WTO)

Under IAS 2, inventory is measured at:

1. AThe higher of cost and current replacement cost
2. BIts expected selling price
3. CIts original cost, whatever happens
4. DThe lower of cost and net realisable value

A company is being sued. Its lawyers say losing is possible but not probable. How is this treated under IAS 37?

1. AIgnored completely
2. BDisclosed as a contingent liability in the notes
3. CRecognised as a provision on the balance sheet
4. DRecognised as an expense and paid into a reserve

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

1. ASpecific identification of each item
2. BWeighted average cost
3. CFIFO (first in, first out)
4. DLIFO (last in, first out)

A product sells for €40 and has a variable cost of €30. What is its contribution-to-sales (C/S) ratio?

1. A25%
2. B10%
3. C75%
4. D33%

After the year end, but before the accounts are approved, a customer who owed money at year end goes bankrupt. Under IAS 10 this is:

1. AA non-adjusting event, disclosed only
2. BIgnored, because it happened after the year end
3. CA change in accounting policy
4. DAn adjusting event, so receivables are reduced

An investor holds 30% of a company's shares and has significant influence but not control. How is the investment usually accounted for in group accounts?

1. AAt cost with no changes ever
2. BBy full consolidation as a subsidiary
3. CUsing the equity method as an associate
4. DAs a joint operation with line-by-line sharing