Financial accounting worksheet with answers

The gross profit margin is calculated as:

1. AGross profit ÷ total assets × 100
2. BGross profit ÷ revenue × 100
3. CRevenue ÷ cost of sales × 100
4. DNet profit ÷ revenue × 100

Opportunity cost is:

1. AThe interest paid on a loan
2. BThe value of the best alternative given up
3. CThe cash cost of buying into a new opportunity
4. DThe total of all past costs

Which of these is normally a fixed cost for a factory?

1. ARent of the factory building
2. BSales commission per unit sold
3. CRaw materials for each unit
4. DPackaging for each unit

Which costs are relevant when making a business decision?

1. AFuture cash flows that differ between the alternatives
2. BAllocated fixed overheads that do not change with the decision
3. CCosts already paid for the project
4. DAll costs in last year's income statement

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

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

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

1. A1.5
2. B0.5
3. C4.5
4. D2.0

Machine hours are scarce. Product X earns €20 contribution and needs 4 hours; product Y earns €15 and needs 2 hours. Which should be made first?

1. AY, because it earns €7.50 per hour versus €5 for X
2. BEither, because the total contribution is the same
3. CX, because it uses more machine time
4. DX, because it earns more contribution per unit

Under IFRS 15, revenue is recognised:

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