Financial accounting worksheet with answers

In double-entry bookkeeping, an increase in an asset account is recorded as:

1. AA credit to revenue only
2. BA credit
3. CA debit to equity
4. DA debit

Contribution per unit is:

1. ASelling price minus variable cost per unit
2. BRevenue minus fixed costs
3. CFixed costs divided by units sold
4. DSelling price minus full absorption cost per unit

Dividends paid to shareholders are recorded as:

1. AAn expense in the income statement for the year
2. BA reduction of retained earnings in equity
3. CRevenue of the shareholders' company
4. DA non-current liability once paid

Net working capital is:

1. ATotal assets minus total liabilities
2. BNon-current assets minus long-term loans
3. CRevenue minus operating expenses
4. DCurrent assets minus current liabilities

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

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

When preparing a bank reconciliation, which item explains why the bank statement balance is higher than the cash book balance?

1. ACheques issued but not yet presented to the bank
2. BA direct debit not yet entered in the cash book
3. CBank charges not yet entered in the cash book
4. DCash deposited but not yet credited on the bank statement

Under IFRS, how is purchased goodwill treated after acquisition?

1. AIt is written off against equity immediately
2. BIt is revalued upwards every year
3. CIt is not amortised but tested for impairment at least annually
4. DIt is amortised over 20 years

Company P buys 70% of the voting shares of S and gains control. How does P report S in its group accounts?

1. AAdd only 70% of each of S's assets, liabilities, income and expenses
2. BConsolidate 100% of S line by line and show a non-controlling interest
3. CKeep the investment at cost and report only the dividends received from S
4. DShow one equity-method investment line for its 70% share of S