Financial accounting worksheet with answers

Which body issues International Financial Reporting Standards (IFRS)?

1. AThe European Central Bank (ECB)
2. BThe International Accounting Standards Board (IASB)
3. CThe World Trade Organization (WTO)
4. DThe International Monetary Fund (IMF)

Information is "material" in financial reporting when:

1. AIt exceeds one million euros
2. BLeaving it out or misstating it could influence users' decisions
3. CIt relates to physical materials and inventory
4. DIt has been checked by the tax authority

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

An item cost €80. It can be sold for €90, but €20 must be spent to sell it. At what amount is it shown in inventory?

1. A€90
2. B€60
3. C€80
4. D€70

Which inventory valuation method assumes the oldest goods are sold first?

1. ALIFO (last in, first out)
2. BWeighted average cost
3. CSpecific identification of each item
4. DFIFO (first in, first out)

Under IAS 38, how are research and development costs treated?

1. ABoth are always capitalised as intangible assets
2. BResearch is capitalised; development is expensed
3. CResearch is expensed; development is capitalised only when strict criteria are met
4. DBoth are always expensed immediately

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

1. A5%
2. B2%
3. C20%
4. D50%

An investor holds 30% of a company's shares and has significant influence but not control. How is the investment usually accounted for in group accounts?

1. AAs a joint operation with line-by-line sharing
2. BAt cost with no changes ever
3. CBy full consolidation as a subsidiary
4. DUsing the equity method as an associate