Financial accounting worksheet with answers

Free printable Financial accounting worksheet: 8 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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Name: ____________________   Date: ____________

1.Easy

Dividends paid to shareholders are recorded as:

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

Accounts receivable are:

  1. AAmounts customers owe the company for sales on credit
  2. BCash held in the bank
  3. CShares owned by investors
  4. DAmounts the company owes its suppliers
3.Easy

What is the main purpose of an external audit?

  1. ATo give an independent opinion on whether the financial statements give a true and fair view
  2. BTo decide the company's dividend policy
  3. CTo guarantee that no fraud has happened
  4. DTo prepare the company's financial statements
4.Medium

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

  1. AFIFO (first in, first out)
  2. BLIFO (last in, first out)
  3. CWeighted average cost
  4. DSpecific identification of each item
5.Medium

A machine costs €10,000 and is depreciated at 20% a year on the reducing balance. What is the depreciation charge in year 2?

  1. A€4,000
  2. B€1,800
  3. C€2,000
  4. D€1,600
6.Medium

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

  1. A2.0
  2. B1.5
  3. C4.5
  4. D0.5
7.Hard

The going concern assumption means financial statements are prepared assuming the entity:

  1. AHas no debts
  2. BWill be sold within one year
  3. CWill continue to operate for the foreseeable future
  4. DWill make a profit every year
8.Hard

Company P buys 70% of the voting shares of S and gains control. How does P report S in its group accounts?

  1. AAdd only 70% of each of S's assets, liabilities, income and expenses
  2. BShow one equity-method investment line for its 70% share of S
  3. CConsolidate 100% of S line by line and show a non-controlling interest
  4. DKeep the investment at cost and report only the dividends received from S

Answer key

  1. 1. B · A reduction of retained earnings in equity
  2. 2. A · Amounts customers owe the company for sales on credit
  3. 3. A · To give an independent opinion on whether the financial statements give a true and fair view
  4. 4. A · FIFO (first in, first out)
  5. 5. D · €1,600
  6. 6. A · 2.0
  7. 7. C · Will continue to operate for the foreseeable future
  8. 8. C · Consolidate 100% of S line by line and show a non-controlling interest

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