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

The systematic allocation of the cost of an intangible asset over its useful life is called:

  1. AAccrual
  2. BAmortisation
  3. CDepreciation of land
  4. DRevaluation
2.Easy

How does management accounting mainly differ from financial accounting?

  1. AIt is regulated by IFRS and must be published
  2. BIt provides information for internal decision-making rather than external users
  3. CIt is prepared only for tax authorities
  4. DIt only reports on past events
3.Easy

A bad debt is:

  1. AA receivable that the company does not expect to collect
  2. BA debt owed to a supplier that is overdue
  3. CAny loan taken out by a company that is currently making losses
  4. DA loan with a high interest rate
4.Medium

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

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

  1. AThe gross margin
  2. BEarnings per share
  3. CThe current ratio
  4. DReturn on equity
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. AProspectively, from the date of the change only
  2. BBy recognising the whole effect as income this year
  3. CRetrospectively, restating comparative figures as if FIFO had always been used
  4. DIt is not allowed to change inventory methods
8.Hard

Closing inventory this year is overstated by €10,000 by mistake. What is the effect on profit, if not corrected?

  1. AProfit is unaffected; only the balance sheet changes
  2. BBoth years' profits are overstated
  3. CThis year's profit is overstated and next year's understated by €10,000
  4. DOnly this year's profit is understated

Answer key

  1. 1. B · Amortisation
  2. 2. B · It provides information for internal decision-making rather than external users
  3. 3. A · A receivable that the company does not expect to collect
  4. 4. B · €9,000
  5. 5. B · It earns more than the required return and should add value
  6. 6. C · The current ratio
  7. 7. C · Retrospectively, restating comparative figures as if FIFO had always been used
  8. 8. C · This year's profit is overstated and next year's understated by €10,000

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