Financial accounting worksheet with answers

Where are transactions first recorded before they are posted to the ledger accounts?

1. AIn the trial balance
2. BIn the auditor's report
3. CIn the balance sheet
4. DIn books of prime entry, such as the journal

Accounts receivable are:

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

How does management accounting mainly differ from financial accounting?

1. AIt is regulated by IFRS and must be published
2. BIt only reports on past events
3. CIt provides information for internal decision-making rather than external users
4. DIt is prepared only for tax authorities

A project costs €100,000 and brings in €25,000 cash per year. What is its payback period?

1. A5 years
2. B4 years
3. C25 years
4. D2.5 years

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

A machine with a carrying amount of €3,000 is sold for €4,000. What is recorded in the income statement?

1. AA loss on disposal of €1,000
2. BA gain on disposal of €1,000
3. CA gain on disposal of €4,000
4. DRevenue of €4,000

Goodwill arises in a business combination when:

1. AThe consideration paid exceeds the fair value of identifiable net assets acquired
2. BA company has a good reputation
3. CThe acquired company makes a loss
4. DAssets are revalued upwards

An increase in accounts receivable during the year, in the indirect cash flow method, is:

1. AAdded to profit
2. BSubtracted from profit to get operating cash flow
3. CShown as an investing outflow
4. DNot relevant to cash flow