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

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

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

A bad debt is:

  1. AA debt owed to a supplier that is overdue
  2. BA loan with a high interest rate
  3. CAny loan taken out by a company that is currently making losses
  4. DA receivable that the company does not expect to collect
3.Easy

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
4.Medium

What is the key difference between absorption costing and marginal costing?

  1. AAbsorption costing ignores variable costs
  2. BMarginal costing includes all overheads in inventory; absorption costing excludes them
  3. CMarginal costing is required by IFRS for external reporting
  4. DAbsorption costing includes fixed production overheads in inventory; marginal costing treats them as period costs
5.Medium

When preparing a bank reconciliation, which item explains why the bank statement balance is higher than the cash book balance?

  1. AA direct debit not yet entered in the cash book
  2. BCash deposited but not yet credited on the bank statement
  3. CCheques issued but not yet presented to the bank
  4. DBank charges not yet entered in the cash book
6.Medium

Profit for ordinary shareholders is €500,000 and there are 1,000,000 ordinary shares. What are basic earnings per share?

  1. A€0.50
  2. B€5.00
  3. C€0.05
  4. D€2.00
7.Hard

Under the matching principle, the cost of a product warranty sold with goods this year should be:

  1. ARecognised only when a customer actually makes a warranty claim
  2. BEstimated and recognised as an expense in the year of sale
  3. CRecorded as revenue
  4. DIgnored until the warranty expires
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. AShow one equity-method investment line for its 70% share of S
  2. BAdd only 70% of each of S's assets, liabilities, income and expenses
  3. CKeep the investment at cost and report only the dividends received from S
  4. DConsolidate 100% of S line by line and show a non-controlling interest

Answer key

  1. 1. D · A debit
  2. 2. D · A receivable that the company does not expect to collect
  3. 3. C · It provides information for internal decision-making rather than external users
  4. 4. D · Absorption costing includes fixed production overheads in inventory; marginal costing treats them as period costs
  5. 5. C · Cheques issued but not yet presented to the bank
  6. 6. A · €0.50
  7. 7. B · Estimated and recognised as an expense in the year of sale
  8. 8. D · Consolidate 100% of S line by line and show a non-controlling interest

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