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.

New worksheetPractise online with hints

For teachers: free to print, copy and use in class. Every new worksheet has new values and its own answer key. A link to ExamProblems on your course page is appreciated.

Name: ____________________   Date: ____________

1.Easy

Under the cash basis of accounting, income and expenses are recorded when:

  1. AThe financial year ends
  2. BCash is received or paid
  3. CThe invoice is approved by the board
  4. DThe goods are ordered
2.Easy

What is the main purpose of an external audit?

  1. ATo guarantee that no fraud has happened
  2. BTo give an independent opinion on whether the financial statements give a true and fair view
  3. CTo prepare the company's financial statements
  4. DTo decide the company's dividend policy
3.Easy

Which is a liability?

  1. AShare capital paid in by owners
  2. BInventory
  3. CCash in hand
  4. DA loan from a bank
4.Medium

At 31 December, electricity used in December (€800) has not yet been billed. Which year-end entry is correct?

  1. ADebit accruals, credit electricity expense
  2. BDebit prepayments, credit cash
  3. CDebit electricity expense, credit accruals
  4. DNo entry until the bill arrives
5.Medium

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

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

Which ratio measures a company's ability to pay its short-term obligations?

  1. AThe gross margin
  2. BEarnings per share
  3. CReturn on equity
  4. DThe current ratio
7.Hard

The standard is 2 labour hours per unit at €20 an hour. 500 units are made in 1,100 hours. What is the labour efficiency variance?

  1. A€22,000 adverse
  2. B€2,000 adverse
  3. C€2,000 favourable
  4. D€1,000 adverse
8.Hard

The going concern assumption means financial statements are prepared assuming the entity:

  1. AWill continue to operate for the foreseeable future
  2. BWill be sold within one year
  3. CHas no debts
  4. DWill make a profit every year

Answer key

  1. 1. B · Cash is received or paid
  2. 2. B · To give an independent opinion on whether the financial statements give a true and fair view
  3. 3. D · A loan from a bank
  4. 4. C · Debit electricity expense, credit accruals
  5. 5. D · €0.50
  6. 6. D · The current ratio
  7. 7. B · €2,000 adverse
  8. 8. A · Will continue to operate for the foreseeable future

Full step-by-step solutions: practise this topic on examproblems.com.