Financial accounting worksheet with answers

The gross profit margin is calculated as:

1. ARevenue ÷ cost of sales × 100
2. BGross profit ÷ total assets × 100
3. CGross profit ÷ revenue × 100
4. DNet profit ÷ revenue × 100

Contribution per unit is:

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

Which of these is a current asset?

1. AInventory
2. BMachinery
3. CA long-term bank loan
4. DLand

Current assets are €300,000 and current liabilities are €150,000. What is the current ratio?

1. A2.0
2. B4.5
3. C1.5
4. D0.5

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

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

A provision is recognised when a company has:

1. AA possible future loss with no obligation
2. BA present obligation from a past event, a probable outflow and a reliable estimate
3. CA profit to distribute
4. DCash set aside in a separate account

A firm has a net profit margin of 5%, asset turnover of 2 and an equity multiplier (assets ÷ equity) of 1.5. Using the DuPont analysis, what is ROE?

1. A15%
2. B7.5%
3. C8.5%
4. D10%

Machine hours are scarce. Product X earns €20 contribution and needs 4 hours; product Y earns €15 and needs 2 hours. Which should be made first?

1. AX, because it uses more machine time
2. BX, because it earns more contribution per unit
3. CEither, because the total contribution is the same
4. DY, because it earns €7.50 per hour versus €5 for X