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

Preparation of financial statements — practice question

Use Source A2 in the insert.
(a(i))[1]

State how non-current asset turnover is worked out.

(a(ii))[2]

Explain why a company may wish to know this ratio.

(b)[1]

Calculate the total net book value of non-current assets of Y Limited on $31$ December $2019$.

(c)[14]

Prepare the non-current assets schedule for use as a note in the financial statements for the year ended 31 December 2020.

(d)[3]

Explain to the directors why motor vehicles need to be depreciated.

(e)[4]

Explain to the directors the effect on profit of using each of the straight-line and reducing balance method of depreciation.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Sales revenue \div the total net book value of non‑current assets

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI