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

Preparation of financial statements — practice question

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

Explain why the club uses the policy of spreading life membership fees equally over ten years.

(b)[4]

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

(c)[9]

Prepare the income and expenditure account covering the year ended 31 December 2024.

(d)[4]

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

(e)[5]

Advise the managing committee whether Meena’s offer should be accepted or rejected. 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: The accrual / matching concept is used to align life membership with the years in which it is used.

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