Financial accounting worksheet with answers

Which financial statement shows a company's financial position at one moment in time?

1. AThe statement of changes in equity over the year
2. BThe balance sheet
3. CThe income statement
4. DThe cash flow statement

What is the main purpose of a trial balance?

1. ATo list all customers who owe money
2. BTo show the company's profit for the year
3. CTo check that total debits equal total credits in the ledger
4. DTo prove that no errors of any kind exist in the ledger accounts

How does management accounting mainly differ from financial accounting?

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

Which costs are relevant when making a business decision?

1. AAll costs in last year's income statement
2. BCosts already paid for the project
3. CAllocated fixed overheads that do not change with the decision
4. DFuture cash flows that differ between the alternatives

A shop buys 100 units at €10, then 100 units at €12, and then sells 150 units. What is cost of sales using FIFO?

1. A€1,700
2. B€1,600
3. C€1,500
4. D€1,650

Budgeted sales are 1,500 units and the break-even point is 1,000 units. What is the margin of safety?

1. A1,500 units
2. B500 units
3. C1,000 units
4. D2,500 units

A company records routine repair costs as additions to non-current assets instead of expenses. What is the effect this year?

1. AOnly cash is affected
2. BProfit is understated and assets are overstated
3. CProfit and assets are overstated
4. DProfit and assets are understated

Under IFRS 16, which lease may a lessee choose to expense on a straight-line basis instead of recognising a right-of-use asset?

1. AAny lease of land and buildings
2. BA ten-year lease of a large production machine
3. CAny lease with monthly payments
4. DA lease with a term of 12 months or less