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WorksheetsIGCSE Financial Statements
Total questions: 50
Worksheet time: 38mins
The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the:
Statement of Financial Position
Income Statement
Trial Balance
General Ledger
Something the business owns is:
accounts
assets
drawings
expense
Amount owed by a business:
liabilities
assets
capital
drawings
A house mortgage balance is an example of
Non-current asset
Current asset
Non-current liabilities
Current liabilities
Choose examples of current assets
Debtors
Cash
Inventory
Stock
Cash at bank is an example of a
Current asset
Non-current asset
Owner's Equity
______________ are short-term debts. The money owed must be paid back within one year.
Current Liabilities
Non-current Liabilities
An overdraft is a:
Current Asset
Current Liability
Non-current Asset
Non-current Liability
A business' inventory is a:
Current Assets
Current Liabilities
Non-current Assets
Non-current Liabilities
Which of these might appear on a Statement Of Financial Position?
Cost of sales
Interest income
Salaries and wages
Creditors
Non-current assets can be converted to cash really quickly.
True
False
Statement of Financial Position lists (Choose all that apply):
Assets
Income
Liabilities
Expenses
A statement of financial position shows:
how much gross profit it has
how much net profit it has
how much a business owns and owes
What is the primary purpose of a statement of financial position?
To calculate the company's tax liability
To provide a snapshot of a company's financial health at a specific point in time
To forecast future profits
To list all company expenses
Which of the following is a current liability?
Bank loan
Mortgage
Trade payables
Intangible assets
Current Assets - Current Liabilities is known as (a) ? (1 mark)
What is the Net Current Asset figure? (1 mark)
(a)
What is the significance of comparing current assets to current liabilities on the statement of financial position?
It is used to calculate depreciation expenses.
It helps assess liquidity and ability to meet short-term obligations.
It reflects the company's marketing strategy.
It helps determine long-term profitability.
An example of a current asset. It is a company or individual who owes money to a business.
Creditor
Debtor
Overdraft
Retained profit
An example of a current liability. It is a company or individual that a business owes money to.
Creditor
Debtor
Overdraft
Retained profit
Money which remains in the business from the previous years net profit (after dividends have been paid to shareholders).
Creditor
Debtor
Overdraft
Retained profit
Which of the following is NOT shown on a statement of financial position (balance sheet)
Assets
Capital
Liabilities
Profit
Bank loan is a _______________.
Non-Current Asset
Current Asset
Non-Current Liability
Current Liability
Motor vehicles is a _______________.
Non-Current Asset
Current Asset
Non-Current Liability
Current Liability
Current Liabilities are:
a) Debts that the company expects to settle within a year
b) Liabilities that will be paid off over multiple years
c) Long-term debts owed to banks
d) The total value of assets available
What is the purpose of Inventory on the balance sheet?
a) It represents cash reserves for the company
b) Goods owned by the company and available for sale to customers
c) A form of liabilities owed to suppliers
d) Fixed assets used in production
What does a current ratio of less than 1 indicate about a company's financial health?
The company has excess cash reserves
The company is likely to receive a credit rating upgrade
The company is financially stable and secure
The company may have difficulties meeting its short-term obligations with its current assets.
What is the formula to calculate the current ratio?
Current Ratio = Current Assets - Current Liabilities
Current Ratio = Fixed Assets / Current Liabilities
Current Ratio = Current Assets / Current Liabilities
Current Ratio = Total Assets / Total Liabilities
What does the current ratio measure?
A company's ability to pay its long-term debts
A company's liquidity and short-term debt-paying ability
A company's profitability
A company's market share
A current ratio of 2:1 indicates that:
Current assets are twice as large as current liabilities
Current liabilities are twice as large as current assets
Total assets are twice as large as total liabilities
Total liabilities are twice as large as total assets
1.What does the current ratio measure?
A) Profitability
B) Liquidity
C) Solvency
E) Efficiency
Explain how a current ratio of 2:1 is interpreted.
For every $2 of current liabilities, the company has $1 of current assets.
The company has 2 times more current liabilities than current assets.
For every $1 of current liabilities, the company has $2 of current assets.
The current ratio is irrelevant for assessing a company's financial health.
A company has an Acid Test Ratio of 0.8. What does this suggest?
The company may struggle to meet its short-term obligations with its liquid assets alone
The company is financially stable
The company has excessive liquidity
The company's long-term liabilities exceed its short-term assets
Lowering salaries
Current assets of £8m (£4m is stock) & Current Liabilities of £2m. What is the Acid Test ratio?
1:2
4:1
2:1
1:4
Current ratio is also known as the acid test ratio
True
False
Sale of assets =
internal source of finance
external source of finance
Whcih of the following consist of only assets?
Car, Bank Loan, Computer
Creditor, Debtors, Cash at Bank
Debtors. Cash at bank, Building
Cash in hand, cash at bank, creditors
Potential cause of the predicted operating profit being low =
Expenses are lower than expected
Sales revenue is too high
Cost of sales could be too low
Cost of sales could be too high
Which of the following best describes the term 'liquidity' in relation to money supply?
It refers to how quickly an asset can be converted into cash
It is the total amount of money in circulation
It measures the value of foreign currency
It indicates the level of savings in the economy
Revenue = 1000
Cost of Goods Sold = 200
Expenses = 300
Gross Profit = ?
800
500
700
300
Describe the relationship between Cost of Sales and Gross Profit.
Gross Profit = Revenue - Cost of Sales
Cost of Sales = Gross Profit + Revenue
Gross Profit = Cost of Sales - Revenue
Gross Profit = Cost of Sales + Revenue
What is the formula to calculate Operating Profit?
Operating Profit = Net Profit + Gross Profit
Operating Profit = Net Profit - Operating Expenses
Operating Profit = Gross Profit - Operating Expenses
Operating Profit = Gross Profit + Operating Expenses
Which one of the following appears on an income statements?
Owner's capital
Expenses
Cash at bank
Value of inventory
A ____ ______ is made
when revenue is greater
than the cost of sales.
(a)
The formula for margin of safety is
Profit - expenses
Selling price - variable cost
Actual sales - breakeven sales
Revenue - costs
The formula for contribution is
Revenue - sales
Selling price - variable cost
Fixed cost + variable cost
Fixed cost/ variable cost
