Financial accounting worksheet with answers

At the break-even point:

1. ASales revenue is zero
2. BVariable costs equal fixed costs
3. CTotal revenue equals total costs
4. DProfit is at its maximum

Which of these is a non-current liability?

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

Dividends paid to shareholders are recorded as:

1. AAn expense in the income statement for the year
2. BA reduction of retained earnings in equity
3. CRevenue of the shareholders' company
4. DA non-current liability once paid

Which error will NOT be revealed by a trial balance?

1. AA debit posted without a matching credit
2. BA sale left out of the books entirely
3. CA balance copied to the wrong column
4. DA wrongly added ledger column

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

On 1 October a company pays €12,000 rent for the next 12 months. Its year ends on 31 December. What is the rent expense for this year?

1. A€3,000
2. B€1,000
3. C€12,000
4. D€9,000

A company issues shares at €5 each with a nominal value of €1. The extra €4 per share is recorded as:

1. ARevenue
2. BA liability
3. CRetained earnings
4. DShare premium

An increase in accounts receivable during the year, in the indirect cash flow method, is:

1. ANot relevant to cash flow
2. BAdded to profit
3. CSubtracted from profit to get operating cash flow
4. DShown as an investing outflow