Financial accounting worksheet with answers

Gross profit is:

1. ARevenue minus cost of goods sold
2. BCash in minus cash out
3. CRevenue minus all expenses
4. DTotal assets minus total liabilities

Which is a liability?

1. AInventory
2. BShare capital paid in by owners
3. CA loan from a bank
4. DCash in hand

The gross profit margin is calculated as:

1. AGross profit ÷ revenue × 100
2. BRevenue ÷ cost of sales × 100
3. CNet profit ÷ revenue × 100
4. DGross profit ÷ total assets × 100

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

A shop buys 100 units at €10, then 100 units at €12, and then sells 150 units. What is cost of sales using FIFO?

1. A€1,700
2. B€1,500
3. C€1,650
4. D€1,600

What is the key difference between absorption costing and marginal costing?

1. AMarginal costing is required by IFRS for external reporting
2. BMarginal costing includes all overheads in inventory; absorption costing excludes them
3. CAbsorption costing includes fixed production overheads in inventory; marginal costing treats them as period costs
4. DAbsorption costing ignores variable costs

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€120,000
3. C€200,000
4. D€0

Under IFRS 16, a lessee typically recognises a lease on the balance sheet as:

1. AAn operating expense only, spread evenly over the lease term
2. BRevenue and inventory
3. CA right-of-use asset and a lease liability
4. DEquity and a provision