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

Preparation of financial statements — practice question

R Limited supplied information and summaries after its accounting records were lost because of a computer virus.
(a)[17]

Prepare the income statement for the year ending 30 June 2019. Use the space on the following page to show your workings.

(b)[4]

State two distinctions between capital reserves and revenue reserves.

(c)[5]

Advise the directors which option should be selected to finance the purchase of the building. Support your answer.

(d(i))[2]

State one advantage and one disadvantage to a business of making every sale on a cash-only basis.

(d(ii))[2]

State one advantage and one disadvantage to a business of making all purchases on a cash-only basis.

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