Financial accounting worksheet with answers

Which of these is an intangible asset?

1. AA delivery van
2. BCash in the bank
3. CInventory of finished goods
4. DA patent

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 prepare the company's financial statements
3. CTo guarantee that no fraud has happened
4. DTo decide the company's dividend policy

Accounts payable (trade payables) are:

1. AProfits paid out to shareholders
2. BCash held in the bank account
3. CAmounts customers owe the business
4. DAmounts the business owes suppliers for purchases on credit

Which costs are relevant when making a business decision?

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

A firm buys 200 units at €5 and 300 units at €6, then sells 400 units. Using weighted average cost, what is closing inventory?

1. A€550
2. B€600
3. C€500
4. D€560

An item cost €80. It can be sold for €90, but €20 must be spent to sell it. At what amount is it shown in inventory?

1. A€60
2. B€80
3. C€90
4. D€70

A firm with spare capacity gets a one-off order at €35 per unit. Variable cost is €30 and full cost including fixed overhead is €42. Assuming no other effects, should it accept?

1. AYes, but only if the price exceeds €42
2. BNo, the price is below full cost
3. CNo, the order makes a €7 loss per unit
4. DYes, each unit adds €5 contribution

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

1. AShown as an investing outflow
2. BAdded to profit
3. CSubtracted from profit to get operating cash flow
4. DNot relevant to cash flow