Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

The balances listed below were taken from the books of K Limited at 30 September 2018.
(a)[10]

Prepare the income statement for the year ended 30 September 2018.

(b)[6]

Prepare the statement of changes in equity for the year ended 30 September 2018.

(c)[5]

Advise the directors which option they should choose. Justify your answer.

(d)[3]

Using all the available information, Analyse the effect that the changes in each of these ratios had on the company’s liquidity.

(e)[3]

State three ways in which a business could reduce trade receivables turnover.

(f)[3]

State three disadvantages of increasing trade payables turnover.

Worked solution & mark scheme

This 30-mark question has a full step-by-step worked solution and mark scheme. One marking point: Revenue totals $936 000$

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