Financial accounting worksheet with answers

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

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

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

Which financial statement shows a company's financial position at one moment in time?

1. AThe balance sheet
2. BThe income statement
3. CThe cash flow statement
4. DThe statement of changes in equity over the year

Fixed costs are €20,000, the selling price is €50 and the variable cost is €30 per unit. What is the break-even point?

1. A2,000 units
2. B667 units
3. C1,000 units
4. D400 units

Which ratio measures a company's ability to pay its short-term obligations?

1. AReturn on equity
2. BEarnings per share
3. CThe gross margin
4. DThe current ratio

A machine costs €10,000 and is depreciated at 20% a year on the reducing balance. What is the depreciation charge in year 2?

1. A€2,000
2. B€1,600
3. C€4,000
4. D€1,800

A company's debt-to-equity ratio rises sharply. What does this usually indicate?

1. AHigher profitability
2. BBetter liquidity in the short term
3. CThat shareholders invested more money
4. DHigher financial risk because the company relies more on borrowed money

The going concern assumption means financial statements are prepared assuming the entity:

1. AWill make a profit every year
2. BWill be sold within one year
3. CWill continue to operate for the foreseeable future
4. DHas no debts