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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1.Easy

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

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

What is the main purpose of an external audit?

  1. ATo decide the company's dividend policy
  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 guarantee that no fraud has happened
3.Easy

A bad debt is:

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

Net working capital is:

  1. ACurrent assets minus current liabilities
  2. BTotal assets minus total liabilities
  3. CRevenue minus operating expenses
  4. DNon-current assets minus long-term loans
5.Medium

Operating profit is €120,000 and interest expense is €30,000. What is interest cover?

  1. A4 times
  2. B3 times
  3. C90,000 times
  4. D0.25 times
6.Medium

On 1 October a company pays €12,000 rent for the next 12 months. Its year ends on 31 December. What is the rent expense for this year?

  1. A€9,000
  2. B€12,000
  3. C€3,000
  4. D€1,000
7.Hard

A firm has a net profit margin of 5%, asset turnover of 2 and an equity multiplier (assets ÷ equity) of 1.5. Using the DuPont analysis, what is ROE?

  1. A8.5%
  2. B7.5%
  3. C10%
  4. D15%
8.Hard

After the year end, but before the accounts are approved, a customer who owed money at year end goes bankrupt. Under IAS 10 this is:

  1. AA non-adjusting event, disclosed only
  2. BIgnored, because it happened after the year end
  3. CAn adjusting event, so receivables are reduced
  4. DA change in accounting policy

Answer key

  1. 1. D · 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. B · A receivable that the company does not expect to collect
  4. 4. A · Current assets minus current liabilities
  5. 5. A · 4 times
  6. 6. C · €3,000
  7. 7. D · 15%
  8. 8. C · An adjusting event, so receivables are reduced

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