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

An accrued expense (accrual) is:

  1. AA cost that will never be paid
  2. BAn expense paid in advance that relates to next year
  3. CAn expense incurred in the period but not yet paid
  4. DIncome received before it is earned
2.Easy

What is the main purpose of a trial balance?

  1. ATo check that total debits equal total credits in the ledger
  2. BTo show the company's profit for the year
  3. CTo list all customers who owe money
  4. DTo prove that no errors of any kind exist in the ledger accounts
3.Easy

Which of these is a non-current liability?

  1. ATax due within three months
  2. BTrade payables due to suppliers next month
  3. CA bank loan repayable in five years
  4. DA bank overdraft
4.Medium

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

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

Return on equity (ROE) is calculated as:

  1. ANet profit / total revenue
  2. BNet profit / shareholders' equity
  3. CTotal assets / equity
  4. DCurrent assets / current liabilities
6.Medium

Budgeted sales are 1,500 units and the break-even point is 1,000 units. What is the margin of safety?

  1. A1,500 units
  2. B2,500 units
  3. C1,000 units
  4. D500 units
7.Hard

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

  1. AAdded back to net profit because it is a non-cash expense
  2. BSubtracted from net profit
  3. CShown in financing activities
  4. DIgnored completely
8.Hard

Making a part costs €10 materials, €6 labour and €4 variable overhead, plus €5 of fixed overhead that continues anyway. A supplier offers it at €22. What should the firm do on cost grounds?

  1. AMake it, because the relevant cost of €20 is below €22
  2. BBuy it, because the full cost of €25 per unit is above €22
  3. CBuy it, because fixed costs are always relevant
  4. DMake it, because the full cost of €25 is below €22

Answer key

  1. 1. C · An expense incurred in the period but not yet paid
  2. 2. A · To check that total debits equal total credits in the ledger
  3. 3. C · A bank loan repayable in five years
  4. 4. A · Absorption costing includes fixed production overheads in inventory; marginal costing treats them as period costs
  5. 5. B · Net profit / shareholders' equity
  6. 6. D · 500 units
  7. 7. A · Added back to net profit because it is a non-cash expense
  8. 8. A · Make it, because the relevant cost of €20 is below €22

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