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

Preparation of financial statements — practice question

Refer to Source C in the insert.
(a)[1]

State one reason why a business should treat some research and development costs as revenue expenditure.

(b)[2]

Name two items, apart from research and development expenditure, which could be shown in a statement of financial position as an intangible asset.

(c)[22]

Prepare the statement of cash flows for the year ended 31 December 2024 in accordance with IAS 7. Include in your answer a value for the amortisation (depreciation) of intangible assets.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Because there is no expectation that the expenditure will help future years” …

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