Financial accounting worksheet with answers

Depreciation is:

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

Which of these is capital expenditure?

1. ABuying a new delivery van
2. BPaying the monthly electricity bill
3. CPaying for the van's fuel
4. DPaying staff wages

Which body issues International Financial Reporting Standards (IFRS)?

1. AThe European Central Bank (ECB)
2. BThe World Trade Organization (WTO)
3. CThe International Accounting Standards Board (IASB)
4. DThe International Monetary Fund (IMF)

Budgeted sales are 1,500 units and the break-even point is 1,000 units. What is the margin of safety?

1. A2,500 units
2. B1,500 units
3. C1,000 units
4. D500 units

Under IAS 38, how are research and development costs treated?

1. ABoth are always capitalised as intangible assets
2. BBoth are always expensed immediately
3. CResearch is expensed; development is capitalised only when strict criteria are met
4. DResearch is capitalised; development is expensed

A firm buys 200 units at €5 and 300 units at €6, then sells 400 units. Using weighted average cost, what is closing inventory?

1. A€560
2. B€550
3. C€600
4. D€500

Under IFRS 15, revenue is recognised:

1. AOnly when cash is received
2. BAt the end of the financial year
3. CWhen the contract is signed
4. DWhen (or as) the entity satisfies a performance obligation by transferring control to the customer

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

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