Financial accounting worksheet with answers

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 a non-current liability?

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

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

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

A company is being sued. Its lawyers say losing is possible but not probable. How is this treated under IAS 37?

1. ADisclosed as a contingent liability in the notes
2. BRecognised as a provision on the balance sheet
3. CRecognised as an expense and paid into a reserve
4. DIgnored completely

Which error will NOT be revealed by a trial balance?

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

Return on equity (ROE) is calculated as:

1. ATotal assets / equity
2. BNet profit / shareholders' equity
3. CCurrent assets / current liabilities
4. DNet profit / total revenue

Operating profit is €200,000 and capital employed (equity plus non-current liabilities) is €1,000,000. What is ROCE?

1. A2%
2. B5%
3. C20%
4. D50%

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

1. ARetained earnings
2. BRevenue
3. CA liability
4. DShare premium