Financial accounting worksheet with answers

At the break-even point:

1. ASales revenue is zero
2. BProfit is at its maximum
3. CTotal revenue equals total costs
4. DVariable costs equal fixed costs

Which body issues International Financial Reporting Standards (IFRS)?

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

Gross profit is:

1. ACash in minus cash out
2. BTotal assets minus total liabilities
3. CRevenue minus all expenses
4. DRevenue minus cost of goods sold

A company finds that a machine will last 8 years instead of the 5 originally estimated. Under IAS 8, how is this change applied?

1. ABy changing the original cost of the machine
2. BRetrospectively, by restating all prior years
3. CBy recognising a large gain in the current year
4. DProspectively, by spreading the remaining carrying amount over the new remaining life

Net working capital is:

1. ATotal assets minus total liabilities
2. BCurrent assets minus current liabilities
3. CNon-current assets minus long-term loans
4. DRevenue minus operating expenses

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

1. A43%
2. B30%
3. C60%
4. D70%

Machine hours are scarce. Product X earns €20 contribution and needs 4 hours; product Y earns €15 and needs 2 hours. Which should be made first?

1. AEither, because the total contribution is the same
2. BX, because it earns more contribution per unit
3. CY, because it earns €7.50 per hour versus €5 for X
4. DX, because it uses more machine time

An asset is impaired when its carrying amount is higher than its:

1. AOriginal purchase price
2. BDepreciation charge
3. CRecoverable amount (the higher of fair value less costs of disposal and value in use)
4. DResidual value only