Practice centre

Challenges

142 scenarios that need judgement as well as the rule. Each closes a lesson: try it cold, then read the lesson if it beats you.

1Accounting Foundations

Early in 2027, Maya and Theo are deciding whether to open a second studio, and they will ask Northgate Bank for a 30,000 loan to fit it out. Which …What accounting is and who uses it · Free
Fernway Bikes Ltd lost its income statement, but the owners kept these figures. Using the accounting equation, what profit did Fernway make for the…The accounting equation · Free
Here is everything that happened at Lumen in the week of Monday 13 to Friday 17 April. By how much did Lumen's total assets change over the week? (…Transactions and economic events · Free
In June a shop sells goods for 14,000: 10,000 for cash and 4,000 on credit. It also collects 3,000 owed from May sales. The goods sold cost 8,500, …Accrual versus cash accounting · Free
Challenge: Lumen's bank statement shows “Transfer from Hollybrook Florists — 3,600 CR”. It settles invoice LDS-0004, for the website Lumen finished…Debits and credits · Free
Challenge: you're reviewing Marigold Bakery's month-end trial balance before it goes to the owner. Which balances look normal, and which should you…Account types and normal balances · Free
Challenge: code this supplier invoice for Lumen. Record it as one entry, using the most specific account for each line.The chart of accounts · Free
Challenge: on 20 April Lumen buys a large-format printer costing 2,400 from Ridgeway Tech, invoice RT-8841. It hands over cheque 202 for 400 on del…Your first journal entries · Free
Challenge: on 30 April three documents are waiting on Lumen's desk. Post whatever entry they require — only what they require.Source documents · Free
Challenge: following on, the managing director explains that Fernway's bank loan requires a minimum profit this year, and recording the February sa…Ethics in accounting · Free
Challenge: it's 30 April, the end of Lumen's first month. Every April transaction has been journalised and posted, and the unadjusted trial balance…The accounting cycle · Free

2Journal Entries and the General Ledger

Challenge: on 26 May Tidewater Yoga transfers 3,750 to Lumen. Its remittance advice says: "2,750 settles invoice LDS-0005 (brand refresh, delivered…Compound journal entries · Free
Challenge: post Lumen's June transactions (listed below; the 30 June adjustments come later) to five accounts and find each balance before adjustme…Posting to the ledger and T-accounts · Free
Challenge: Wren Garden Supplies' trial balance shows debits of 63,480 and credits of 63,030. The review finds four problems. For each, enter the ch…The unadjusted trial balance · Free
Challenge: Corvid Cycle Repairs' year ends on 31 December. On 1 November it paid 7,200 for six months' workshop rent (November–April), and the book…Adjusting entries: prepayments and unearned revenue · Members
Challenge: it's 31 December at Corvid Cycle Repairs. Record one compound adjusting entry for everything that needs accruing. (1) The electricity bi…Adjusting entries: accrued expenses and revenue · Members
Challenge: Thistle Bakery's loan interest (60 a month) is paid quarterly. On 30 April it accrued 120 for March and April, flagged "auto-reverse", a…Reversing entries · Members
Challenge: Marlow's owner reviews your draft. She says: (h) "Don't accrue the tutors' 3 days — payday is 4 January, so it's next year's cost." (i) …The adjusted trial balance · Members
Challenge: Inkwell Trade Supplies' invoice IW-5602 for a new 2,600 plotter, bought on credit by Harbour Print Co., was posted as: debit Repairs and…Finding and correcting errors · Members
Challenge: after Corvid posted its 31 December closing entry, the controller notices two problems. Dividends declared still shows a 3,000 debit — t…Closing entries and the post-closing trial balance · Members

3Financial Statements

Challenge: a junior bookkeeper drafted Ridgeway Cycles' 2026 income statement. You find that "operating expenses" of 52,000 include dividends paid …The income statement · Free
Challenge: prepare the key totals of Thornbury Tools' statement of financial position at 31 December 2026. The bank loan of 48,000 is repayable in …The statement of financial position · Members
Challenge: a client's draft accounts show total equity of 84,000 at the start of the year and 97,500 at the end. During the year it issued shares f…The statement of changes in equity · Members
Challenge: after the 2025 statements were issued, Harbour finds that its 31 December 2025 inventory count included 2,000 of goods that had already …How the statements connect · Members
Challenge: Fernvale Distributors expects sales to grow from 360,000 this year to 540,000 next year at a 5% profit margin, with depreciation of 3,00…Profit versus cash flow · Members
Challenge: prepare Sutton Print Works' operating cash flow reconciliation for 2026 from profit for the year. Enter each adjustment with its sign, a…Cash flow statement: the indirect method · Members
Challenge: Fenwick Wholesale's revenue for 2026 was 500,000. Gross trade receivables (before the allowance) rose from 60,000 to 72,000, after writi…Cash flow statement: the direct method · Members
Challenge: complete Larchmont Engineering's statement of cash flows totals for 2027, its first year under IFRS 18 (no specified main business activ…Investing and financing activities · Members
Challenge: in 2026 Brookfield changes its inventory cost formula from weighted average to FIFO because FIFO better reflects its stock rotation, and…Accounting policies and notes · Members
Challenge: you're preparing questions for Cedarline's lender. Revenue +12.5%, receivables +35.0%, inventory +44.0%, borrowings +54.3%, cash −40.0%,…Comparative and common-size statements · Members
Challenge: Cedarline's loan agreement requires debt-to-equity of no more than 0.80 and interest cover of at least 5.0 times, tested on year-end fig…Financial statement analysis with ratios · Members

4Accounting for Assets

Fennick Hardware's new bookkeeper has left you the October records. Prepare the bank reconciliation at 31 October and work out what the cash accoun…Bank reconciliations · Members
Challenge: Juniper sells 10,000 of furniture to Calder Hotels on terms 2/10, net 30. Calder has taken every settlement discount for five years, so …Accounts receivable and the receivables ledger · Members
Ashgrove Wholesale started the year with an allowance of 2,400. During the year it wrote off 3,150 of debts — a large customer failed — and recover…Credit losses and the allowance method · Members
Challenge: Saltmarsh's sister shop, Saltmarsh Outlet, uses a periodic system. During the year it debited all purchases and freight-in to Cost of sa…Periodic and perpetual inventory systems · Members
Calloway's sales manager says: "Switch to moving average with perpetual records — it'll cut cost of sales and lift profit." Using the same April da…Inventory cost formulas: FIFO and weighted average · Members
Challenge: Brightwater also holds a commercial range cooker costing 15,000. At 31 December 2026 it was listed at 18,000. On 12 January 2027, before…Lower of cost and net realisable value · Members
Challenge: Kestrel builds a new warehouse. Costs: contractor 800,000; site clearance and levelling 40,000; architect's fees 60,000; rework after a …Recognising property, plant and equipment · Members
Tamsin Couriers buys a van for 48,000 on 1 July 2026; it is available for use the same day. Residual value 8,000; useful life 5 years or 160,000 km…Depreciation methods · Members
Brackley Joinery bought a CNC router for 52,000 on 1 January 2023 (straight-line, 8 years, residual 4,000; year end 31 December). On 31 March 2027 …Disposals of property and equipment · Members
Challenge: Northgate develops a customer-portal platform for its own use (IFRS). Costs: feasibility study and evaluation of alternatives 20,000; co…Intangible assets and amortisation · Members
Challenge: Redfern's US parent reports under US GAAP. For the same press at 31 December 2026 (carrying amount 120,000), undiscounted expected cash …Impairment of assets · Members
Challenge: Ashcombe's treasury holds a portfolio of plain fixed-rate corporate bonds to fund a factory to be built over the next three years. It co…Investments and financial assets · Members

5Liabilities and Equity

Challenge: from the reconciliation above, post the single correcting entry Kestrel needs in its own books. When the goods on invoice FT-1302 arrive…Accounts payable and accrued liabilities · Members
Challenge: on 10 December the board of Lindqvist decides to close its Vale Road plant, with an estimated cost of 850,000. At 31 December no detaile…Provisions and contingent liabilities · Members
Challenge: Harrow's 900,000 loan due in 2029 breached its leverage covenant on 30 November 2026. On 20 December 2026 the bank agreed in writing to …Classifying liabilities as current or non-current · Members
Challenge: show how Pinecrest presents the borrowing in its statement of financial position at 31 December 2026 (enter 0 where nothing belongs in a…Loans and interest accruals · Members
Challenge: suppose instead the market rate was 7%, so investors paid 479,499.01 for the same bonds, and Arcadia paid 19,426.11 of underwriting and …Bonds and the effective interest method · Members
Challenge: Brightwater's US sister company signs an identical lease and reports under US GAAP, where it is classified as an operating lease. Compar…Lease accounting for lessees · Members
Challenge: at 1 January 2026 Fenwick had 100,000 shares of 1.00 in issue (share capital 100,000, no share premium) and retained earnings of 45,000.…Share capital and share issues · Members
Challenge: you are preparing the financing section of the 2027 cash flow statement for Haddon Mills, another company in the Marlow group, and the d…Dividends and retained earnings · Members
Challenge: at the year end the board cancels the 3,000 shares still held in treasury (nominal 1.00, cost 4.20 each). Company law allows the excess …Treasury shares · Members

6Revenue, Expenses and Profit

Challenge: Brightfold Fitness Supply delivers 80,000 of gym equipment to a newly formed studio. The studio has no funding, its owner has missed pay…The five-step revenue model · Members
Challenge: Ashgrove Systems contracts with a hospital to supply 40 networked monitoring devices, install them and write the interface software that…Performance obligations · Members
Challenge: Oakridge (allocation above) delivers the equipment and completes installation on 1 March; support runs for the 12 months from 1 March. T…Transaction price and allocation · Members
Challenge: Norcastle Marine builds a custom research vessel to a university's specification; it can't be sold to anyone else without major rework. …Over time or at a point in time · Members
Challenge: Kitewell Software sells a 3-year support contract at 30,000 a year (its stand-alone price), billed annually. At the start of year 2 the …Contract modifications · Members
Challenge: on 1 October Saltmarsh Foods paid an agency 12,000 in advance for a 12-month social-media management service delivered evenly, and the b…Expense recognition and matching · Members
Challenge: a draft IFRS 18 income statement for Thornbury Plastics shows operating profit of 163,000. It was built as revenue 980,000 − cost of sal…Gross profit, operating profit and profit · Members
Challenge: on 29 December a customer of Ridgeway signs for 400 drill sets (40,000) and asks Ridgeway to keep them until its new store opens in Febr…Revenue and expense cut-off · Members

7Cost and Managerial Accounting

Challenge: Corbel employs one quality inspector for every 4,000 units produced a month, at 3,000 a month each. Output is 7,500 units, so two inspec…Classifying costs · Members
Challenge: Corbel's sister plant ends the year with 12,000 of over-applied overhead — material enough that the controller decides to prorate it. Ov…Job-order costing · Members
Challenge: Brightwater's Finishing department adds tins (materials) at the very end of the process; conversion is added evenly. This month 18,000 u…Process costing · Members
Challenge: Kestrel prices Custom labels at cost plus 25%. Direct materials and labour are 14.00 a label, so the current price is (14.00 + 12.00) × …Activity-based costing · Members
Challenge: Tamarind (currently 4,000 bags, profit 7,200) can adopt one of four plans next month. Which gives the highest expected profit, and what …Cost-volume-profit analysis · Members
Challenge: Fennick could automate assembly. Fixed costs would rise to 160,000 a year and variable cost would fall to 35.00 a lamp; the price stays …Break-even and target profit · Members
Challenge: Corbel makes 4,000 upholstered seat pads a year and a supplier offers them at 46.00 each. Making costs 38.00 of variable cost a pad plus…Relevant costs and make-or-buy decisions · Members
Challenge: Spinning has spare capacity this year but insists on charging the market price of 10.00 a kg. Weaving finds an outside supplier offering…Transfer pricing fundamentals · Members
Challenge: a new oak supplier charges 8.40 a kg delivered (against 8.00 now), but its kiln-dried boards are straighter: normal cutting waste falls …Standard costs · Members
Challenge: Corbel's purchasing manager earns a bonus on favourable price variances and points to April's 600 F materials price variance. The produc…Variance analysis · Members

8Budgeting and Performance Management

Challenge: Fernhill's kiln can fire at most 5,600 mugs a month. The budget needs 5,200 in February and 5,900 in March. What is the best way to revi…Operating budgets · Members
Challenge: Fernhill's directors look at the March overdraft. Which response is soundest?Cash budgets · Members
Challenge: the bank will grant the loan only if Fernhill's budgeted current ratio at 31 March is at least 2.0, treating the new loan as a current l…The master budget · Members
Challenge: the marketing director wants the forecast to assume 640 new subscribers a month — double the average — 'because we're launching a big ca…Forecasting fundamentals · Members
Challenge: in the monthly review, Kestrel's production director says: 'Materials were 20,500 over budget, but that's entirely because we built 100 …Flexible budgets · Members
Challenge: the sales director celebrates the 27,750 favourable price variance; the operations director blames sales for the 18,000 adverse volume v…Budget versus actual analysis · Members
Challenge: the Northern region director can refurbish a hotel for 400,000, adding 60,000 a year of controllable profit (a 15% return). The group's …Responsibility accounting and cost centres · Members
Challenge: to fund the credit-control project, Calder's finance director proposes simply paying all suppliers at 60 days instead of the agreed 30, …Working capital management · Members
Challenge: which headline should open Pinecrest's monthly report to the leadership team?KPIs and management reporting · Members

9Intermediate and Advanced Financial Reporting

Challenge: Tallis Foods spent 2.4 million on a national TV campaign that management believes has built a valuable brand. The CFO argues the brand i…The Conceptual Framework · Members
Challenge: while preparing its 2026 statements, Eskdale Ltd finds that its 31 December 2025 inventory was overstated by 30,000 because of a countin…Estimates, policy changes and errors · Members
Challenge: Kittering's draft 2025 profit is 500,000. Before authorisation: (1) the lawsuit settles 60,000 above the provision; (2) year-end invento…Events after the reporting period · Members
Challenge: in another group, the segments that pass the 10% tests have external revenue of 590 million. The entity's total external revenue is 870 …Related parties and segment reporting · Members
Challenge: Kelso classifies a portfolio of corporate loans as hold to collect. This year, to fund an unexpected acquisition, it sold 30% of the por…Classifying financial instruments · Members
Challenge: Marsh's Level 3 assets opened the year at 252,000. During the year it bought 25,000 of Level 3 assets, recognised 8,000 of fair value ga…Fair value measurement · Members
Challenge: in 2027 Kestrel makes a tax loss, so current tax is nil. At 31 December 2027 (rate 20%): equipment carrying amount 340,000, tax base 230…Deferred tax · Members
Challenge: Brancaster plc reports a loss from continuing operations attributable to ordinary shareholders of 1,200,000, but a profit of 2,700,000 f…Earnings per share · Members
Challenge: Ardent plc already owned 30% of Corsa Ltd, equity-accounted at a carrying amount of 2,800,000. It buys another 50% for 6,000,000 cash an…Business combinations and goodwill · Members
Challenge: at 31 December 2026 Pellam's impairment test finds goodwill on Rook impaired by 100,000. NCI is measured at its proportionate share of n…The consolidation worksheet · Members
Challenge: on 1 January 2026 Pellam sold equipment to Rook for 500,000. Its carrying amount in Pellam's books was 400,000 and its remaining useful …Intercompany eliminations · Members
Challenge: Marlowe orders a machine for EUR 100,000. It pays a EUR 40,000 non-refundable deposit on 1 October when EUR 1 = SAR 4.0000, and the bala…Foreign currency transactions · Members
Challenge: a group sells its entire holding in Aldo Srl, a wholly owned foreign subsidiary, for SAR 11,000,000. At the date of sale the consolidate…Translating foreign operations · Members

10Auditing and Internal Controls

Challenge: Brightwater Marine was audited for the first time this year. The auditor was appointed after year end and couldn't attend the inventory …The purpose of a financial statement audit · Members
Challenge: Marlowe Garden Products' sales director earns a bonus if annual revenue exceeds 9,000,000. Recorded revenue is 9,100,000. December invoi…Audit assertions · Members
Challenge: Corvane's materiality was planned at 5% of forecast profit before tax of 1,840,000, with performance materiality at 75% and the clearly …Materiality · Members
Challenge: for Pelloran's warranty provision (a significant risk; materiality 120,000) you develop your own range instead of testing management's c…Audit risk · Members
Challenge: Talvik's two developers can change programs in the live ERP system without approval or a change log, so the team's plan to rely on the a…Internal control principles · Members
Challenge: redesign Fenwick & Daughters' finance duties. Ola keeps opening the post and banking cheques. Priya can give about two hours a month. As…Segregation of duties · Members
Challenge: at Morrow Textiles, 3 of 60 payroll changes (5%, the tolerable rate) lacked HR authorisation. All three were pay-rate increases for payr…Testing controls · Members
Challenge: you followed up the Dunmore difference (Kestrel's ledger 92,000, Dunmore's reply 48,000) using evidence you obtained yourself. Kestrel's…Audit evidence · Members
Challenge: Larkfield Distribution's inventory totals 3,200,000. Every line over 40,000 (key items) was price-tested in full; the rest was sampled. …Sampling fundamentals · Members
Challenge: the sales director refused to let you confirm Kestrel's 410,000 receivable from Arden Wholesale (materiality 90,000), so you performed a…Substantive testing · Members
Challenge: after reporting Brookline Consulting to Selwyn Hotels' finance director and audit committee, you extend your procedures. You match every…Fraud risk indicators · Members
Challenge: Ardent's management corrected only the legal accrual (B), leaving uncorrected misstatements that overstate profit by 37,700 (overall mat…Audit adjustments and deficiencies · Members
Challenge: you're reviewing this draft memo on Halvern Logistics' restructuring provision of 1.8 million (materiality 95,000): 'Board approved rest…Documentation and professional judgment · Members

11Tax Accounting and Regional Practice

Challenge: in its first month Rawda Imports, a VAT-registered trader, imports goods for 4,000 plus 15% VAT (recoverable) and pays 200 of non-recove…How taxes appear in the accounts · Members
Challenge: prepare Dune Stationery's June VAT return. During June it issued a credit note for returned goods, and it held a staff party whose input…VAT: input and output tax · Members
Challenge: Palmline Services makes standard-rated, zero-rated and exempt supplies. Complete its VAT position for the quarter, assuming a VAT rate o…Taxable, zero-rated and exempt supplies · Members
Challenge: Saltmarsh Engineering's year-end. Complete the deferred tax worksheet at 20%, the deferred tax expense, and total tax expense. Current t…Current and deferred tax · Members
Challenge: prepare Heronsgate Group's tax rate reconciliation (applicable rate 20%). Enter decreases as negative amounts. The foreign subsidiary's …The tax rate reconciliation · Members
Challenge: an IFRS group's costs for the year include corporate income tax of 45,000 in a foreign subsidiary, 5,000 withheld by that country on the…International differences in tax treatment · Members

12Accounting Technology and Professional Practice

Challenge: You investigate the "+15000" in Juniper's September accruals workbook (total cell "=SUM(D5:D80)+15000", posted to 2100 Accrued expenses)…Spreadsheet-based accounting · Members
Challenge: You now run that interface reconciliation for September. Compare the payroll system's gross-pay report with the payroll journals the ERP…Accounting systems and ERPs · Members
Challenge: Juniper's system trial balance shows September debit activity of 1,284,960.00. The export the analyst received totals 1,262,410.00 of de…GL exports and data validation · Members
Challenge: Juniper is mapping a newly acquired subsidiary's trial balance to the group reporting chart. Several account names are misleading. Map e…Chart-of-accounts mapping · Members
Challenge: Larkfield's controller proposes a revised close plan. Test it against the dependency chain before anyone promises the CFO a 5-day close.…The month-end close · Members
Challenge: You send the 2410 Other provisions reconciliation back and re-perform it yourself from evidence. Complete the reconciliation at 30 Septe…Balance sheet reconciliation workflows · Members
Challenge: You obtain the support for the finance.temp provision release. The audit log shows the journal was approved at 25,000 and edited to 40,0…Audit trails and financial controls · Members
Challenge: The freight-accrual model has been running under your approved design since June. Back-test it: compare each month's estimate with the f…Accounting automation · Members
Challenge: You extend the testing to every manual revenue journal posted by m.lindqvist in 2026 and quantify the effect on each quarter's reported …Accounting analytics · Members

13Industry Accounting Cases

Challenge: take a different autumn for October's points (contract liability 3,703.70, allocated when 4,000 of the 5,000 points were expected to be …Retail: inventory, returns and loyalty points · Members
Challenge: in November a supplier strike halts Ironvale's main line for three weeks. Only 1,200 machine hours are worked, producing 2,400 shelving …Manufacturing: work in progress and overhead · Members
Challenge: it's the December WIP review. Using the engagement notes, work out each engagement's December revenue and Pellow's contract liability at…Professional services: unbilled work · Members
Challenge: Orrin Freight signs a three-year subscription. Brightloop's price for this package is 100,000 a year, payable annually at the end of eac…SaaS: subscriptions and deferred revenue · Members
Challenge: Building B's carrying amount at 1 January 2026 was 2,500,000. At 31 December the valuer reports fair value of 2,640,000, based on all co…Real estate: rental income and investment property · Members
Challenge: the general manager's year-end pack shows two items as fourth-quarter revenue. Work out the correct figures for the year ending 31 Decem…Hospitality: deposits and daily revenue · Members
Challenge: after a spike in chargebacks, the platform began holding back 5% of each payout as a rolling reserve, released after 90 days. Kitebird's…E-commerce: payment platforms and returns · Members
Challenge: truck RH-17's year 2. At the start of the year the fleet engineer, using tracker data, revises the chassis's remaining life to 598,000 k…Logistics: fleet costs and fuel · Members
Challenge: near the end of year 2 Granite Peak submits a 250,000 claim to the warehouse customer for delays caused by the customer's late design ch…Construction: contracts over time · Members
Challenge: at the start of year 3 Brennock enters insolvency proceedings and the loan moves to stage 3. Opening gross carrying amount 500,000 (simp…Financial services: loans and interest income · Members

14Accounting Career and Interview Preparation

Challenge — a favourite follow-up: "At the start of the year we buy equipment for 1,000 cash. We depreciate 200 this year. The tax rate is 25% and …Accounting interview questions · Members
Challenge — error correction. While reviewing the year-end ledger (books still open for 31 December) you find that a 4,800 invoice for repairing th…Journal entry assessment · Members
Challenge. You've joined Cedarline mid-year. The 31 August bank reconciliation prepared by your predecessor 'balances' only because of a line 'Timi…Account reconciliation test · Members
Challenge. After you've finished, the warehouse manager reports that goods costing 1,500 in the year-end count were water-damaged by a roof leak be…Financial reporting test · Members
Challenge. On 1 October Fernbrook received an invoice for a 12-month maintenance contract on its warehouse equipment, 1 October to 30 September: 6,…Junior accountant practical test · Members
Challenge. Build Orchid's operating cash flow and free cash flow from the extracts (indirect method, starting from profit; treat finance costs as a…Financial analyst accounting assessment · Members
Challenge. At the end of February Kestrel accrued 2,200 of legal fees (professional fees). The accrual reversed automatically on 1 March. In March …Month-end close practical exam · Members

15Professional Accounting Standards

Challenge. Rimal Packaging Co., an unlisted Saudi company that elected full IFRS as endorsed in Saudi Arabia, is acquired by a US-listed group repo…IFRS, US GAAP and local frameworks · Members
Challenge. Zafran's US-listed parent reports under US GAAP. This year Zafran's US GAAP profit before tax is 500,000. It also prepares IFRS statemen…IFRS versus US GAAP: key differences · Members
Challenge. It's November 2026. Halwan Trading prepares IFRS statements for the year ending 31 December 2026 and hasn't chosen to early adopt IFRS 1…How to read a standard · Members
Challenge. Review Lumen Optics' assistant controller's draft year-end memo (IFRS). For each sentence, is it correct as written, and if not, what's …Financial reporting terminology · Members
Challenge. IFRS. On 1 January Sadeem installs fuel tanks at a leased-in depot site and pays the contractor's invoice of 240,000 by bank transfer. T…Standards-based cases · Members