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

Preparation of financial statements — practice question

Consult Source A in the insert.
(a)[3]

Explain why the club uses a policy of apportioning life membership fees evenly over ten years.

(b)[4]

Calculate the profit/loss earned from running the vending machine for the year ended 31 December 2024.

(c)[9]

Prepare the income and expenditure account for the year ending 31 December 2024.

(d)[4]

Prepare a statement that shows how the accumulated fund changed during the year ended 31 December 2024.

(e)[5]

Advise the managing committee on whether Meena’s offer ought to be accepted, and justify your view.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: The accrual / matching concept is applied so life membership income is matched to the years used

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