BALANCE SHEET EXAM PRACTICE PAPER 1 –
ACCOUNTING & FINANCE | STATEMENT OF FINANCIAL
POSITION (FOUNDATION LEVEL) | 40 FULLY WORKED
QUESTIONS WITH ANSWERS, STEP-BY-STEP
CALCULATIONS & DETAILED RATIONALE | REVISION &
EXAM PREPARATION RESOURCE
COURSE NAME
Accounting and Finance – Financial Statements (Balance Sheet / Statement of
Financial Position)
LEVEL
College / First-Year University (Foundation Level)
SHORT INTRODUCTION
This Balance Sheet exam paper is designed to help Accounting and Finance
students understand the structure and preparation of the Statement of Financial
Position. It covers assets, liabilities, and equity using structured exam-style
questions with fully worked solutions and clear explanations.
Ideal for revision, practice tests, and exam preparation.
INSTRUCTIONS
• Answer ALL questions
• Show full working for calculations
• Use correct accounting classifications
• Time allowed: 2 hours
• All questions carry equal marks unless stated
, PAPER 1 – BALANCE SHEET (FOUNDATION LEVEL)
40 QUESTIONS WITH ANSWERS AND DETAILED RATIONALE
SECTION A: CONCEPT QUESTIONS (1–25)
1. A balance sheet shows:
A. Profit only
B. Financial position at a point in time
C. Cash flow only
D. Sales performance
Answer: B
Rationale: It shows assets, liabilities, and equity at a specific date.
2. The accounting equation is:
A. Assets = Revenue + Expenses
B. Assets = Liabilities + Equity
C. Liabilities = Assets + Profit
D. Equity = Sales – Costs
Answer: B
Rationale: It is the fundamental accounting equation.
3. Assets are:
A. Amounts owed
B. Resources owned by a business
C. Business expenses
D. Sales revenue
Answer: B
Rationale: Assets provide future economic benefit.
ACCOUNTING & FINANCE | STATEMENT OF FINANCIAL
POSITION (FOUNDATION LEVEL) | 40 FULLY WORKED
QUESTIONS WITH ANSWERS, STEP-BY-STEP
CALCULATIONS & DETAILED RATIONALE | REVISION &
EXAM PREPARATION RESOURCE
COURSE NAME
Accounting and Finance – Financial Statements (Balance Sheet / Statement of
Financial Position)
LEVEL
College / First-Year University (Foundation Level)
SHORT INTRODUCTION
This Balance Sheet exam paper is designed to help Accounting and Finance
students understand the structure and preparation of the Statement of Financial
Position. It covers assets, liabilities, and equity using structured exam-style
questions with fully worked solutions and clear explanations.
Ideal for revision, practice tests, and exam preparation.
INSTRUCTIONS
• Answer ALL questions
• Show full working for calculations
• Use correct accounting classifications
• Time allowed: 2 hours
• All questions carry equal marks unless stated
, PAPER 1 – BALANCE SHEET (FOUNDATION LEVEL)
40 QUESTIONS WITH ANSWERS AND DETAILED RATIONALE
SECTION A: CONCEPT QUESTIONS (1–25)
1. A balance sheet shows:
A. Profit only
B. Financial position at a point in time
C. Cash flow only
D. Sales performance
Answer: B
Rationale: It shows assets, liabilities, and equity at a specific date.
2. The accounting equation is:
A. Assets = Revenue + Expenses
B. Assets = Liabilities + Equity
C. Liabilities = Assets + Profit
D. Equity = Sales – Costs
Answer: B
Rationale: It is the fundamental accounting equation.
3. Assets are:
A. Amounts owed
B. Resources owned by a business
C. Business expenses
D. Sales revenue
Answer: B
Rationale: Assets provide future economic benefit.
