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

Depreciation is:

  1. AThe interest paid on debts
  2. BPaying off a loan in instalments
  3. CSpreading the cost of a non-current asset over its useful life
  4. DA fall in the market value of shares
2.Easy

What is the main purpose of a trial balance?

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

Revenue minus all expenses equals:

  1. ANet profit (or loss)
  2. BGross profit, before operating expenses
  3. CCash flow
  4. DEquity
4.Medium

Which error will NOT be revealed by a trial balance?

  1. AA sale left out of the books entirely
  2. BA balance copied to the wrong column
  3. CA wrongly added ledger column
  4. DA debit posted without a matching credit
5.Medium

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. BDisclosed as a contingent liability in the notes
  3. CRecognised as a provision on the balance sheet
  4. DIgnored completely
6.Medium

Return on equity (ROE) is calculated as:

  1. ANet profit / total revenue
  2. BNet profit / shareholders' equity
  3. CTotal assets / equity
  4. DCurrent assets / current liabilities
7.Hard

Budgeted overhead is €200,000 for 40,000 machine hours. Actual hours are 42,000 and actual overhead is €205,000. What is the result?

  1. AOverhead exactly absorbed
  2. BOverhead over-absorbed by €5,000
  3. COverhead under-absorbed by €10,000
  4. DOverhead under-absorbed by €5,000
8.Hard

A firm has spent €50,000 on market research for a new product and must decide whether to launch it. How should the €50,000 be treated in the decision?

  1. AIgnored, because it is a sunk cost
  2. BAdded to the launch cost
  3. CDeducted from expected sales
  4. DSpread over the product's expected life

Answer key

  1. 1. C · Spreading the cost of a non-current asset over its useful life
  2. 2. D · To check that total debits equal total credits in the ledger
  3. 3. A · Net profit (or loss)
  4. 4. A · A sale left out of the books entirely
  5. 5. B · Disclosed as a contingent liability in the notes
  6. 6. B · Net profit / shareholders' equity
  7. 7. B · Overhead over-absorbed by €5,000
  8. 8. A · Ignored, because it is a sunk cost

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