Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Fernando and Gurdip have operated as sole traders for several years and have chosen to combine their businesses into a partnership.
(a)[11]

Prepare the partnership’s opening statement of financial position at 1 July 2015.

(b)[4]

Prepare the partnership’s budgeted appropriation account for the year ending 30 June 2016.

(c)[1]

State what the term ‘incorporation’ means.

(d)[9]

Advise the partners on whether they should convert their business into a limited company. Justify your answer by analysing two benefits and two limitations for them.

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