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

Preparation of financial statements — practice question

Consult Source C in the insert.

(a)[4]

State four purposes of a statement of cash flows.

(b)[5]

Calculate the profit from operations for the year to 31 December 2024.

(c)[11]

Prepare the statement of cash flows for the year ended 31 December 2024 in line with IAS 7.

(d)[5]

Advise the directors whether they should go ahead with their plan 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: “Explain the difference between profit and cash” …