Financial accounting worksheet with answers

An accrued expense (accrual) is:

1. AAn expense paid in advance that relates to next year
2. BA cost that will never be paid
3. CIncome received before it is earned
4. DAn expense incurred in the period but not yet paid

Where are transactions first recorded before they are posted to the ledger accounts?

1. AIn books of prime entry, such as the journal
2. BIn the trial balance
3. CIn the auditor's report
4. DIn the balance sheet

Which of these is an intangible asset?

1. AA patent
2. BA delivery van
3. CInventory of finished goods
4. DCash in the bank

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

1. A2.5 years
2. B5 years
3. C4 years
4. D25 years

A product sells for €40 and has a variable cost of €30. What is its contribution-to-sales (C/S) ratio?

1. A25%
2. B10%
3. C75%
4. D33%

Which error will NOT be revealed by a trial balance?

1. AA balance copied to the wrong column
2. BA sale left out of the books entirely
3. CA wrongly added ledger column
4. DA debit posted without a matching credit

The standard is 2 labour hours per unit at €20 an hour. 500 units are made in 1,100 hours. What is the labour efficiency variance?

1. A€1,000 adverse
2. B€22,000 adverse
3. C€2,000 favourable
4. D€2,000 adverse

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

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