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.

New worksheetPractise online with hints

For teachers: free to print, copy and use in class. Every new worksheet has new values and its own answer key. A link to ExamProblems on your course page is appreciated.

Name: ____________________   Date: ____________

1.Easy

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

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

Which body issues International Financial Reporting Standards (IFRS)?

  1. AThe International Accounting Standards Board (IASB)
  2. BThe International Monetary Fund (IMF)
  3. CThe World Trade Organization (WTO)
  4. DThe European Central Bank (ECB)
3.Easy

A bad debt is:

  1. AAny loan taken out by a company that is currently making losses
  2. BA loan with a high interest rate
  3. CA receivable that the company does not expect to collect
  4. DA debt owed to a supplier that is overdue
4.Medium

At 31 December, electricity used in December (€800) has not yet been billed. Which year-end entry is correct?

  1. ADebit electricity expense, credit accruals
  2. BDebit prepayments, credit cash
  3. CDebit accruals, credit electricity expense
  4. DNo entry until the bill arrives
5.Medium

Revenue is €200,000 and cost of sales is €140,000. What is the gross profit margin?

  1. A43%
  2. B60%
  3. C70%
  4. D30%
6.Medium

A project costs €100,000 and brings in €25,000 cash per year. What is its payback period?

  1. A25 years
  2. B4 years
  3. C5 years
  4. D2.5 years
7.Hard

An increase in accounts receivable during the year, in the indirect cash flow method, is:

  1. AShown as an investing outflow
  2. BSubtracted from profit to get operating cash flow
  3. CAdded to profit
  4. DNot relevant to cash flow
8.Hard

Over three years a company reports rising profits while operating cash flow keeps falling. What should an analyst suspect?

  1. AThe company must have repaid all its loans
  2. BThe company has very high earnings quality
  3. CProfits may be driven by aggressive accruals, such as rising receivables or capitalised costs
  4. DDepreciation must have been too high

Answer key

  1. 1. D · A debit
  2. 2. A · The International Accounting Standards Board (IASB)
  3. 3. C · A receivable that the company does not expect to collect
  4. 4. A · Debit electricity expense, credit accruals
  5. 5. D · 30%
  6. 6. B · 4 years
  7. 7. B · Subtracted from profit to get operating cash flow
  8. 8. C · Profits may be driven by aggressive accruals, such as rising receivables or capitalised costs

Full step-by-step solutions: practise this topic on examproblems.com.