Financial accounting worksheet with answers

Accounts payable (trade payables) are:

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

Contribution per unit is:

1. AFixed costs divided by units sold
2. BSelling price minus variable cost per unit
3. CRevenue minus fixed costs
4. DSelling price minus full absorption cost per unit

Which statement shows cash coming in and going out in operating, investing and financing activities?

1. AThe balance sheet
2. BThe cash flow statement
3. CThe income statement
4. DThe notes to the accounts only

A company is being sued. Its lawyers say losing is possible but not probable. How is this treated under IAS 37?

1. ARecognised as an expense and paid into a reserve
2. BIgnored completely
3. CDisclosed as a contingent liability in the notes
4. DRecognised as a provision on the balance sheet

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

1. A25 years
2. B4 years
3. C2.5 years
4. D5 years

Under IAS 16, which cost should be included in the cost of a new machine?

1. AStaff training costs after it starts operating
2. BGeneral office overheads for the year
3. CRepairs carried out two years later
4. DInstallation costs needed to get it working

The standard is 2 labour hours per unit at €20 an hour. 500 units are made in 1,100 hours. What is the labour efficiency variance?

1. A€2,000 adverse
2. B€2,000 favourable
3. C€1,000 adverse
4. D€22,000 adverse

A company issues shares at €5 each with a nominal value of €1. The extra €4 per share is recorded as:

1. ARetained earnings
2. BA liability
3. CShare premium
4. DRevenue