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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1.Easy

Dividends paid to shareholders are recorded as:

  1. AA non-current liability once paid
  2. BAn expense in the income statement for the year
  3. CA reduction of retained earnings in equity
  4. DRevenue of the shareholders' company
2.Easy

How is cost of goods sold calculated for a trading business?

  1. AOpening inventory − purchases + closing inventory
  2. BPurchases + closing inventory
  3. CRevenue − purchases − closing inventory
  4. DOpening inventory + purchases − closing inventory
3.Easy

A customer pays in advance for services the company will provide next year. At year end the money is shown as:

  1. ARevenue of this year (cash received)
  2. BAn expense of this year
  3. CA non-current asset
  4. DA liability (deferred revenue)
4.Medium

On 1 October a company pays €12,000 rent for the next 12 months. Its year ends on 31 December. What is the rent expense for this year?

  1. A€12,000
  2. B€9,000
  3. C€3,000
  4. D€1,000
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. C1.5
  4. D2.0
6.Medium

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

  1. A1.5
  2. B2.0
  3. C0.5
  4. D4.5
7.Hard

Two firms have the same operating profit, but one is financed mostly by debt. When operating profit falls by 20%, the highly geared firm's net profit:

  1. AFalls by a larger percentage
  2. BFalls by a smaller percentage
  3. CRises because interest is fixed
  4. DFalls by exactly 20% as well
8.Hard

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. AEither, because the total contribution is the same
  2. BY, because it earns €7.50 per hour versus €5 for X
  3. CX, because it uses more machine time
  4. DX, because it earns more contribution per unit

Answer key

  1. 1. C · A reduction of retained earnings in equity
  2. 2. D · Opening inventory + purchases − closing inventory
  3. 3. D · A liability (deferred revenue)
  4. 4. C · €3,000
  5. 5. B · 1.0
  6. 6. B · 2.0
  7. 7. A · Falls by a larger percentage
  8. 8. B · Y, because it earns €7.50 per hour versus €5 for X

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