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

Preparation of financial statements — practice question

Draft financial statements for a business reported a profit for the year of $62\,000$. The following mistakes were identified. 1. Accrued loan interest payable of $3900$ had not been included in the accounts. 2. Allowance for irrecoverable debts was overstated by $4800$. 3. Depreciation was discovered to be understated by $7500$. 4. Prepaid rent expense of $2600$ had not been included. What profit for the year was correct after the adjustments?

  • A$43\,200$
  • B$48\,400$
  • C$58\,000$
  • D$60\,600$

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

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