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

Preparation of financial statements — practice question

Tariq operates a retail business, although he does not keep complete accounting records. Every purchase is made on credit, whereas all sales are for cash. Tariq supplied information relating to the year ended 30 September 2019.
(a)[4]

Calculate the amount of credit purchases made in the year ended 30 September 2019.

(b)[3]

Calculate the depreciation on furniture and equipment for the year ended 30 September 2019.

(c)[5]

Calculate the amount of Tariq’s cash drawings for the year ended 30 September 2019.

(d)[9]

Prepare an income statement for the year ended 30 September 2019.

(e(i))[2]

Explain the accounting concept known as business entity.

(e(ii))[2]

Explain the accounting concept known as substance over form.

(f)[5]

Advise Tariq which of these actions he should choose. Support your advice.

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