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

Preparation of financial statements — practice question

The proprietor of a trading business had prepared draft financial statements for the year ended 31 December. It was later found that the following transactions, which took place during the year, had not been entered. 1. A cheque for $500$ had been received in respect of commission earned. 2. Cash of $2\,900$ was received from selling goods that had cost $3\,000$. 3. Inventory costing $5\,000$ had been withdrawn by the owner for private use. 4. Non-current assets with a carrying value of $6\,500$ had been sold for cash of $7\,000$. Which of these transactions will alter both the gross profit for the year and the total net assets shown in the statement of financial position?

  • A1 and 2
  • B1 and 4
  • C2 and 3
  • D3 and 4

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