Financial accounting worksheet with answers

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

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

In double-entry bookkeeping, an increase in a liability is recorded as:

1. ANo entry until it is paid
2. BA credit
3. CA debit to cash only
4. DA debit

A bad debt is:

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

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

1. ARevenue of €4,000
2. BA gain on disposal of €4,000
3. CA gain on disposal of €1,000
4. DA loss on disposal of €1,000

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€90
2. B€60
3. C€70
4. D€80

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

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

Under the IAS 16 revaluation model, a building is revalued upwards for the first time. Where does the gain go?

1. ATo a provision on the balance sheet
2. BTo revenue in the income statement
3. CTo other comprehensive income and a revaluation surplus in equity
4. DTo retained earnings as a realised profit

A company sells a software licence together with two years of support for one price. Under IFRS 15, how is revenue recognised?

1. ARecognise half the price in each year without splitting it by obligation
2. BAllocate the price using standalone selling prices; recognise the licence at delivery and support over two years
3. CRecognise the whole price at once when the customer signs the contract
4. DDefer the whole price and recognise it when the two years of support end