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

Preparation of financial statements — practice question

The information below is provided for S Limited for the year ended 31 December 2019.
(a)[10]

Prepare the income statement covering the year ended 31 December 2019.

(b)[2]

Explain what is meant by the phrase ‘Reserves were maintained in their most flexible form’.

(c)[4]

Prepare the ordinary share capital account covering the year ended 31 December 2019.

(d)[5]

Prepare the statement of changes in equity covering the year ended 31 December 2019.

(e)[9]

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

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