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

Preparation of financial statements — practice question

A sole trader is getting ready to prepare his income statement for the year ended 31 December 2021, which was his first year in business. The details below are given. Takings banked: 16400 Payments made to trade payables: 8500 Expenses incurred during the year: 2900 Closing balance of trade payables: 1200 Closing balance of trade receivables: 700 During the year, he withdrew goods for his own use, $1000. There was no closing inventory. What profit did he make for the year?

  • A$4500
  • B$5500
  • C$7400
  • D$7900

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