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

Money or goods taken out of a sole trader's business for personal use are called:

  1. ADrawings
  2. BLiabilities
  3. CDividends
  4. DExpenses
2.Easy

Which of these increases a sole trader's capital (equity)?

  1. ADrawings by the owner
  2. BA profit for the year
  3. CRepaying a bank loan
  4. DBuying inventory for cash
3.Easy

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

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

Retained earnings represent:

  1. ACash kept in the bank
  2. BMoney owed to shareholders
  3. CThe share price
  4. DAccumulated profits that have not been paid out as dividends
5.Medium

Current assets are €300,000, including inventory of €100,000. Current liabilities are €200,000. What is the quick (acid-test) ratio?

  1. A0.5
  2. B1.0
  3. C2.0
  4. D1.5
6.Medium

Net working capital is:

  1. ACurrent assets minus current liabilities
  2. BRevenue minus operating expenses
  3. CNon-current assets minus long-term loans
  4. DTotal assets minus total liabilities
7.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. ASpread over the product's expected life
  2. BIgnored, because it is a sunk cost
  3. CAdded to the launch cost
  4. DDeducted from expected sales
8.Hard

An investor holds 30% of a company's shares and has significant influence but not control. How is the investment usually accounted for in group accounts?

  1. AUsing the equity method as an associate
  2. BAt cost with no changes ever
  3. CAs a joint operation with line-by-line sharing
  4. DBy full consolidation as a subsidiary

Answer key

  1. 1. A · Drawings
  2. 2. B · A profit for the year
  3. 3. D · A debit
  4. 4. D · Accumulated profits that have not been paid out as dividends
  5. 5. B · 1.0
  6. 6. A · Current assets minus current liabilities
  7. 7. B · Ignored, because it is a sunk cost
  8. 8. A · Using the equity method as an associate

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