Financial accounting worksheet with answers

Where are transactions first recorded before they are posted to the ledger accounts?

1. AIn the trial balance
2. BIn the auditor's report
3. CIn the balance sheet
4. DIn books of prime entry, such as the journal

Under IAS 2, inventory is measured at:

1. AThe higher of cost and current replacement cost
2. BIts expected selling price
3. CThe lower of cost and net realisable value
4. DIts original cost, whatever happens

Contribution per unit is:

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

Trade receivables are €50,000 and annual credit sales are €365,000. What are the receivable days?

1. A36.5 days
2. B50 days
3. C73 days
4. D7.3 days

A company increases its allowance for doubtful receivables. What is the effect?

1. ACash decreases immediately
2. BAn expense is recognised and net receivables fall
3. COnly the notes change; no figures move
4. DRevenue increases and gross receivables rise by the same amount

What is the key difference between absorption costing and marginal costing?

1. AAbsorption costing ignores variable costs
2. BAbsorption costing includes fixed production overheads in inventory; marginal costing treats them as period costs
3. CMarginal costing is required by IFRS for external reporting
4. DMarginal costing includes all overheads in inventory; absorption costing excludes them

In the indirect method of the cash flow statement, depreciation is:

1. ASubtracted from net profit
2. BShown in financing activities
3. CIgnored completely
4. DAdded back to net profit because it is a non-cash expense

Budgeted overhead is €200,000 for 40,000 machine hours. Actual hours are 42,000 and actual overhead is €205,000. What is the result?

1. AOverhead under-absorbed by €10,000
2. BOverhead under-absorbed by €5,000
3. COverhead exactly absorbed
4. DOverhead over-absorbed by €5,000