Financial accounting worksheet with answers

Accounts payable (trade payables) are:

1. AAmounts the business owes suppliers for purchases on credit
2. BAmounts customers owe the business
3. CCash held in the bank account
4. DProfits paid out to shareholders

Depreciation is:

1. APaying off a loan in instalments
2. BSpreading the cost of a non-current asset over its useful life
3. CA fall in the market value of shares
4. DThe interest paid on debts

Dividends paid to shareholders are recorded as:

1. AA non-current liability once paid
2. BA reduction of retained earnings in equity
3. CRevenue of the shareholders' company
4. DAn expense in the income statement for the year

Operating profit is €120,000 and interest expense is €30,000. What is interest cover?

1. A90,000 times
2. B4 times
3. C0.25 times
4. D3 times

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

1. A10%
2. B33%
3. C25%
4. D75%

Net working capital is:

1. ATotal assets minus total liabilities
2. BNon-current assets minus long-term loans
3. CCurrent assets minus current liabilities
4. DRevenue minus operating expenses

A firm has spent €50,000 on market research for a new product and must decide whether to launch it. How should the €50,000 be treated in the decision?

1. AAdded to the launch cost
2. BDeducted from expected sales
3. CSpread over the product's expected life
4. DIgnored, because it is a sunk cost

Budgeted overhead is €200,000 for 40,000 machine hours. Actual hours are 42,000 and actual overhead is €205,000. What is the result?

1. AOverhead under-absorbed by €5,000
2. BOverhead over-absorbed by €5,000
3. COverhead under-absorbed by €10,000
4. DOverhead exactly absorbed