Financial accounting worksheet with answers

Which of these is a non-current liability?

1. AA bank overdraft
2. BTrade payables due to suppliers next month
3. CTax due within three months
4. DA bank loan repayable in five years

The gross profit margin is calculated as:

1. ARevenue ÷ cost of sales × 100
2. BNet profit ÷ revenue × 100
3. CGross profit ÷ revenue × 100
4. DGross profit ÷ total assets × 100

Information is "material" in financial reporting when:

1. AIt relates to physical materials and inventory
2. BIt has been checked by the tax authority
3. CIt exceeds one million euros
4. DLeaving it out or misstating it could influence users' decisions

A company increases its allowance for doubtful receivables. What is the effect?

1. ARevenue increases and gross receivables rise by the same amount
2. BCash decreases immediately
3. COnly the notes change; no figures move
4. DAn expense is recognised and net receivables fall

Return on equity (ROE) is calculated as:

1. ACurrent assets / current liabilities
2. BNet profit / shareholders' equity
3. CTotal assets / equity
4. DNet profit / total revenue

An item cost €80. It can be sold for €90, but €20 must be spent to sell it. At what amount is it shown in inventory?

1. A€70
2. B€90
3. C€80
4. D€60

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

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

A company's debt-to-equity ratio rises sharply. What does this usually indicate?

1. AHigher profitability
2. BThat shareholders invested more money
3. CBetter liquidity in the short term
4. DHigher financial risk because the company relies more on borrowed money