Financial accounting worksheet with answers

Which is a liability?

1. AShare capital paid in by owners
2. BInventory
3. CA loan from a bank
4. DCash in hand

Under IAS 2, inventory is measured at:

1. AThe lower of cost and net realisable value
2. BIts expected selling price
3. CIts original cost, whatever happens
4. DThe higher of cost and current replacement cost

A customer pays in advance for services the company will provide next year. At year end the money is shown as:

1. AA liability (deferred revenue)
2. BAn expense of this year
3. CRevenue of this year (cash received)
4. DA non-current asset

Cost of sales is €600,000 and average inventory is €100,000. What is the inventory turnover?

1. A0.17 times a year
2. B6 times a year
3. C16 times a year
4. D60 times a year

Profit for ordinary shareholders is €500,000 and there are 1,000,000 ordinary shares. What are basic earnings per share?

1. A€2.00
2. B€0.05
3. C€5.00
4. D€0.50

An asset costs €50,000, has a residual value of €5,000 and a useful life of 5 years. What is the annual straight-line depreciation?

1. A€5,000
2. B€10,000
3. C€11,000
4. D€9,000

Budgeted overhead is €200,000 for 40,000 machine hours. Actual hours are 42,000 and actual overhead is €205,000. What is the result?

1. AOverhead over-absorbed by €5,000
2. BOverhead exactly absorbed
3. COverhead under-absorbed by €10,000
4. DOverhead under-absorbed by €5,000

When does activity-based costing (ABC) give the biggest improvement over traditional absorption costing?

1. AWhen a firm makes only one standard product
2. BWhen overheads are large and driven by activities like set-ups rather than volume
3. CWhen all costs are variable with labour hours
4. DWhen overheads are very small compared with direct costs