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

Preparation of financial statements — practice question

Read Source A from the insert.
(a)[8]

Prepare the manufacturing account for the year ending 31 December 2024.

(b)[7]

Prepare the statement of profit or loss for the year ending 31 December 2024.

(c(i))[2]

Explain why unrealised profit arises in certain manufacturing businesses.

(c(ii))[3]

Explain why the provision for unrealised profit is recognised in the statement of financial position.

(d)[5]

Advise Nadim whether or not he should incorporate his business in light of this being his only concern. Justify your answer.

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