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

Preparation of financial statements — practice question

Ahmed and Raji trade as partners in a retail business, yet they have not kept complete accounting records. They have been advised to adopt a double entry system of book-keeping.
(a)[3]

State three advantages to business owners of using the double entry system of book-keeping.

(b(i))[3]

Calculate the profit or loss on the disposal of the motor vehicle.

(b(ii))[4]

Calculate the total depreciation charge on motor vehicles for the year ended 30 April 2019.

(c)[9]

Prepare the income statement of the partnership for the year ended 30 April 2019.

(d)[4]

Explain why a business might set up a provision for doubtful debts.

(e)[7]

Advise the partners on which option, if any, they should accept. Support your answer with reasons.

Worked solution & mark scheme

This 30-mark question has a full step-by-step worked solution and mark scheme. One marking point: It gives current information on assets and liabilities and supports decision making

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