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

Preparation of financial statements — practice question

Refer to Source A in the insert.
(a)[4]

Identify which costs may form part of the inventory cost of work in progress.

(b)[8]

Prepare the manufacturing account for the year ending 31 December 2023.

(c)[8]

Prepare the statement of profit or loss for the year ending 31 December 2023.

(d)[5]

Advise the directors whether they should spend money on researching a new material or not. Justify your answer.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Cost of purchasing direct materials

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