Financial accounting worksheet with answers

Free printable Financial accounting worksheet: 8 problems from easy to exam level, with an answer key. Print it or save it as a PDF.

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Name: ____________________   Date: ____________

1.Easy

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

  1. ARaw materials for each unit
  2. BPackaging for each unit
  3. CRent of the factory building
  4. DSales commission per unit sold
2.Easy

Accounts payable (trade payables) are:

  1. AAmounts the business owes suppliers for purchases on credit
  2. BCash held in the bank account
  3. CProfits paid out to shareholders
  4. DAmounts customers owe the business
3.Easy

Dividends paid to shareholders are recorded as:

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

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

  1. AA direct debit not yet entered in the cash book
  2. BCheques issued but not yet presented to the bank
  3. CBank charges not yet entered in the cash book
  4. DCash deposited but not yet credited on the bank statement
5.Medium

A project has a positive net present value (NPV) at the company's cost of capital. This means:

  1. AIts reported accounting profit will be positive in every year
  2. BIt earns more than the required return and should add value
  3. CIt recovers its cost within one year
  4. DIt has no risk at all
6.Medium

Fixed costs are €20,000, the selling price is €50 and the variable cost is €30 per unit. What is the break-even point?

  1. A667 units
  2. B1,000 units
  3. C2,000 units
  4. D400 units
7.Hard

A company changes its inventory method from weighted average to FIFO because it gives more relevant information. Under IAS 8, how is this applied?

  1. AIt is not allowed to change inventory methods
  2. BRetrospectively, restating comparative figures as if FIFO had always been used
  3. CBy recognising the whole effect as income this year
  4. DProspectively, from the date of the change only
8.Hard

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. BNo, the price is below full cost
  3. CYes, but only if the price exceeds €42
  4. DYes, each unit adds €5 contribution

Answer key

  1. 1. C · Rent of the factory building
  2. 2. A · Amounts the business owes suppliers for purchases on credit
  3. 3. D · A reduction of retained earnings in equity
  4. 4. B · Cheques issued but not yet presented to the bank
  5. 5. B · It earns more than the required return and should add value
  6. 6. B · 1,000 units
  7. 7. B · Retrospectively, restating comparative figures as if FIFO had always been used
  8. 8. D · Yes, each unit adds €5 contribution

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