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

Preparation of financial statements — practice question

A sole trader worked out her draft profit for the year as $50000. She sought advice from her accountant about four matters that she believed could change the draft profit. 1 A customer debt of $2000 is to be written off as irrecoverable. 2 She treated her drawings of $10000 as though they were staff salaries. 3 She wishes to raise the value of a non-current asset by $20000. 4 The current depreciation charge is overstated by $5000. What was the profit for the year?

  • A$43000
  • B$57000
  • C$63000
  • D$73000

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