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

Contribution per unit is:

  1. ASelling price minus full absorption cost per unit
  2. BSelling price minus variable cost per unit
  3. CRevenue minus fixed costs
  4. DFixed costs divided by units sold
2.Easy

Revenue minus all expenses equals:

  1. AGross profit, before operating expenses
  2. BNet profit (or loss)
  3. CCash flow
  4. DEquity
3.Easy

Which of these is a current asset?

  1. ALand
  2. BA long-term bank loan
  3. CMachinery
  4. DInventory
4.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. ABy changing the original cost of the machine
  2. BProspectively, by spreading the remaining carrying amount over the new remaining life
  3. CRetrospectively, by restating all prior years
  4. DBy recognising a large gain in the current year
5.Medium

Why can a profitable company run out of cash?

  1. AProfit includes credit sales and non-cash items, while cash may be tied up in receivables and inventory
  2. BProfitable companies never pay taxes
  3. CProfit always equals cash
  4. DCash is not recorded in accounting
6.Medium

Cost of sales is €600,000 and average inventory is €100,000. What is the inventory turnover?

  1. A16 times a year
  2. B0.17 times a year
  3. C60 times a year
  4. D6 times a year
7.Hard

A company sells a software licence together with two years of support for one price. Under IFRS 15, how is revenue recognised?

  1. AAllocate the price using standalone selling prices; recognise the licence at delivery and support over two years
  2. BDefer the whole price and recognise it when the two years of support end
  3. CRecognise half the price in each year without splitting it by obligation
  4. DRecognise the whole price at once when the customer signs the contract
8.Hard

A parent sold goods to its subsidiary at a profit, and the subsidiary still holds them at year end. What must happen on consolidation?

  1. AThe sale is shown as external revenue of the group
  2. BNothing, because each company is a separate entity
  3. CThe profit is shown twice, once for each company
  4. DThe unrealised profit in inventory is eliminated

Answer key

  1. 1. B · Selling price minus variable cost per unit
  2. 2. B · Net profit (or loss)
  3. 3. D · Inventory
  4. 4. B · Prospectively, by spreading the remaining carrying amount over the new remaining life
  5. 5. A · Profit includes credit sales and non-cash items, while cash may be tied up in receivables and inventory
  6. 6. D · 6 times a year
  7. 7. A · Allocate the price using standalone selling prices; recognise the licence at delivery and support over two years
  8. 8. D · The unrealised profit in inventory is eliminated

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