Financial accounting worksheet with answers

Gross profit is:

1. ACash in minus cash out
2. BRevenue minus cost of goods sold
3. CTotal assets minus total liabilities
4. DRevenue minus all expenses

A bad debt is:

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

Which of these is a non-current liability?

1. ATrade payables due to suppliers next month
2. BA bank overdraft
3. CA bank loan repayable in five years
4. DTax due within three months

A company increases its allowance for doubtful receivables. What is the effect?

1. AOnly the notes change; no figures move
2. BRevenue increases and gross receivables rise by the same amount
3. CCash decreases immediately
4. DAn expense is recognised and net receivables fall

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

Budgeted sales are 1,500 units and the break-even point is 1,000 units. What is the margin of safety?

1. A500 units
2. B1,500 units
3. C1,000 units
4. D2,500 units

Under the IAS 16 revaluation model, a building is revalued upwards for the first time. Where does the gain go?

1. ATo other comprehensive income and a revaluation surplus in equity
2. BTo retained earnings as a realised profit
3. CTo revenue in the income statement
4. DTo a provision on the balance sheet

An asset has a carrying amount of €500,000, fair value less costs of disposal of €380,000 and value in use of €420,000. What impairment loss is recognised?

1. A€80,000
2. B€0
3. C€200,000
4. D€120,000