Accounting 9706 · AS & A Level · Preparation of financial statements
Preparation of financial statements — practice question
A trainee accountant has just prepared the financial statements for a business for the year ended 31 December 2024. Some errors were then found. The business sells all goods with a mark-up of 20%. The draft profit for the year ended 31 December 2024 was $36960.
(a)[8]
Complete the table to identify and describe the accounting concept that has been overlooked in each error.
(b)[6]
Calculate the revised profit for the year ended 31 December 2024. Draft profit is $36 960.
(c)[1]
State the accounting concept that should be used when deciding whether this asset ought to be entered in the statement of financial position.
Worked solution & mark scheme
This 15-mark question has a full step-by-step worked solution and mark scheme.