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

At the break-even point:

  1. ASales revenue is zero
  2. BTotal revenue equals total costs
  3. CProfit is at its maximum
  4. DVariable costs equal fixed costs
2.Easy

How does management accounting mainly differ from financial accounting?

  1. AIt provides information for internal decision-making rather than external users
  2. BIt is regulated by IFRS and must be published
  3. CIt only reports on past events
  4. DIt is prepared only for tax authorities
3.Easy

In double-entry bookkeeping, every transaction:

  1. AIncreases both assets and expenses equally
  2. BIs recorded only once
  3. CMust involve cash
  4. DIs recorded with equal debits and credits
4.Medium

Under IAS 38, how are research and development costs treated?

  1. AResearch is expensed; development is capitalised only when strict criteria are met
  2. BBoth are always capitalised as intangible assets
  3. CBoth are always expensed immediately
  4. DResearch is capitalised; development is expensed
5.Medium

Profit for ordinary shareholders is €500,000 and there are 1,000,000 ordinary shares. What are basic earnings per share?

  1. A€0.50
  2. B€5.00
  3. C€2.00
  4. D€0.05
6.Medium

A company finds that a machine will last 8 years instead of the 5 originally estimated. Under IAS 8, how is this change applied?

  1. ARetrospectively, by restating all prior years
  2. BBy changing the original cost of the machine
  3. CProspectively, by spreading the remaining carrying amount over the new remaining life
  4. DBy recognising a large gain in the current year
7.Hard

Making a part costs €10 materials, €6 labour and €4 variable overhead, plus €5 of fixed overhead that continues anyway. A supplier offers it at €22. What should the firm do on cost grounds?

  1. ABuy it, because the full cost of €25 per unit is above €22
  2. BBuy it, because fixed costs are always relevant
  3. CMake it, because the full cost of €25 is below €22
  4. DMake it, because the relevant cost of €20 is below €22
8.Hard

When does activity-based costing (ABC) give the biggest improvement over traditional absorption costing?

  1. AWhen a firm makes only one standard product
  2. BWhen overheads are large and driven by activities like set-ups rather than volume
  3. CWhen all costs are variable with labour hours
  4. DWhen overheads are very small compared with direct costs

Answer key

  1. 1. B · Total revenue equals total costs
  2. 2. A · It provides information for internal decision-making rather than external users
  3. 3. D · Is recorded with equal debits and credits
  4. 4. A · Research is expensed; development is capitalised only when strict criteria are met
  5. 5. A · €0.50
  6. 6. C · Prospectively, by spreading the remaining carrying amount over the new remaining life
  7. 7. D · Make it, because the relevant cost of €20 is below €22
  8. 8. B · When overheads are large and driven by activities like set-ups rather than volume

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