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

Preparation of financial statements — practice question

AB Limited trades as a wholesaler of household goods. The information below has been taken from the accounting records at 31 December 2018.
(a)[10]

Prepare the income statement covering the year ended 31 December 2018.

(b)[9]

Prepare the statement of financial position as at 31 December 2018. Put your workings in the space provided on the next page.

(c)[5]

Advise the directors on which option they ought to choose. Explain your reasons.

(d)[2]

Identify two internal stakeholders who have an interest in the financial statements of a limited company.

(e(i))[2]

Name two ratios that a business may use when assessing profitability.

(e(ii))[2]

Name two ratios that a business may use when assessing liquidity.

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