Financial accounting worksheet with answers

Under the cash basis of accounting, income and expenses are recorded when:

1. AThe financial year ends
2. BThe invoice is approved by the board
3. CThe goods are ordered
4. DCash is received or paid

Contribution per unit is:

1. AFixed costs divided by units sold
2. BSelling price minus full absorption cost per unit
3. CSelling price minus variable cost per unit
4. DRevenue minus fixed costs

In double-entry bookkeeping, an increase in a liability is recorded as:

1. AA debit to cash only
2. BNo entry until it is paid
3. CA debit
4. DA credit

Net working capital is:

1. ANon-current assets minus long-term loans
2. BRevenue minus operating expenses
3. CCurrent assets minus current liabilities
4. DTotal assets minus total liabilities

When preparing a bank reconciliation, which item explains why the bank statement balance is higher than the cash book balance?

1. ACash deposited but not yet credited on the bank statement
2. BCheques issued but not yet presented to the bank
3. CA direct debit not yet entered in the cash book
4. DBank charges not yet entered in the cash book

Retained earnings represent:

1. ACash kept in the bank
2. BThe share price
3. CMoney owed to shareholders
4. DAccumulated profits that have not been paid out as dividends

Under IFRS 16, which lease may a lessee choose to expense on a straight-line basis instead of recognising a right-of-use asset?

1. AAny lease of land and buildings
2. BA ten-year lease of a large production machine
3. CA lease with a term of 12 months or less
4. DAny lease with monthly payments

A firm with spare capacity gets a one-off order at €35 per unit. Variable cost is €30 and full cost including fixed overhead is €42. Assuming no other effects, should it accept?

1. ANo, the order makes a €7 loss per unit
2. BYes, but only if the price exceeds €42
3. CNo, the price is below full cost
4. DYes, each unit adds €5 contribution