Financial accounting worksheet with answers

Accounts receivable are:

1. ACash held in the bank
2. BAmounts the company owes its suppliers
3. CAmounts customers owe the company for sales on credit
4. DShares owned by investors

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

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

A sunk cost is:

1. AA cost saved by a decision
2. BA cost that will be paid next year
3. CA cost that changes in total with the level of output
4. DA cost already incurred that cannot be recovered

Net working capital is:

1. ACurrent assets minus current liabilities
2. BTotal assets minus total liabilities
3. CNon-current assets minus long-term loans
4. DRevenue minus operating expenses

Current assets are €300,000 and current liabilities are €150,000. What is the current ratio?

1. A4.5
2. B0.5
3. C1.5
4. D2.0

Which depreciation method charges the same amount every year?

1. AUnits of production
2. BStraight-line
3. CReducing balance
4. DSum-of-the-years'-digits

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

1. AEquity and a provision
2. BAn operating expense only, spread evenly over the lease term
3. CRevenue and inventory
4. DA right-of-use asset and a lease liability

Company P buys 70% of the voting shares of S and gains control. How does P report S in its group accounts?

1. AAdd only 70% of each of S's assets, liabilities, income and expenses
2. BKeep the investment at cost and report only the dividends received from S
3. CShow one equity-method investment line for its 70% share of S
4. DConsolidate 100% of S line by line and show a non-controlling interest