Preparation of financial statements — IGCSE Accounting (0985) questions by topic
Preparation of financial statements asks you to identify which items belong in a statement of financial position, evaluate statements about partnership accounts such as interest on drawings, and reconstruct full financial statements for a trader like Stella or Ben who has kept incomplete records. Calculate, find, state, identify and evaluate are the top command words, so expect to build missing figures from partial information as often as you complete a straightforward statement.
Marks run from 1 to 20 across the 32 real questions gathered here, from papers set between 2023 and 2025. Because incomplete-records questions chain one calculation into the next, submit your workings for instant marking to catch an early error, such as a misclassified manufacturing cost, before it distorts every figure that depends on it.
What examiners look for
- A recurring criticism is omitting direct wages from prime cost, or including supervisors' wages in prime cost instead of overheads.
- Examiners note candidates who included the delivery vehicle driver's expense in manufacturing costs, when it should be charged to the income statement instead.
- A common mistake was using a cash payment figure to suppliers instead of the purchases figure, or using the full cost of a motor vehicle in the income statement as an error of principle.
- Reports flag prepayments being frequently omitted from current assets, and disadvantages of a policy being too focused on irrecoverable debts rather than the broader impact on liquidity.
- Few candidates were familiar with how capital is increased by profit and reduced by drawings, and some used a single cash figure incorrectly as the whole drawings total.
May–June 2025, Paper 11
Which items are shown in a statement of financial position? current assets revenue capital non-current liabilities --- --- --- --- --- A yes yes yes no B no no yes yes C no yes no…
Answer this question and get it marked →What is an advantage to a sole trader of forming a partnership? A Decisions are always acted on immediately. B Decisions are taken by the directors. C Partners share profits and…
Answer this question and get it marked →Which statements are correct in relation to the financial statements of a partnership? 1 Interest on partners' capital is shown as an expense in the income statement. 2 Interest…
Answer this question and get it marked →R Limited provided the following information. $ --- --- At 1 January 2024 ordinary share capital 350 000 retained earnings 46 000 general reserve 37 000 For year ended 31 December…
Answer this question and get it marked →A club included the balance on its accumulated fund in its statement of financial position. What is the equivalent of the accumulated fund in a statement of financial position of…
Answer this question and get it marked →Which item is included in a manufacturing account? A carriage on purchases of finished goods B depreciation of delivery vehicles C repairs of factory machinery D salaries of…
Answer this question and get it marked →A trader's assets increased by $25 000 and liabilities decreased by $5000 during the year. He took no drawings during the year. What was the profit or loss for the year? A $20 000…
Answer this question and get it marked →A trader does not maintain a full set of accounting records. How could he calculate the profit for the year? A closing capital – opening capital – drawings – capital introduced B…
Answer this question and get it marked →Janice started trading on 1 January. All her sales were made on a cash basis. During the year, Janice paid wages of $12 100 and took drawings of $7800 out of the amount received…
Answer this question and get it marked →A trader provided the following information. $ --- --- revenue 120 000 inventory at the start of the year 9600 inventory at the end of the year 10 200 A mark-up of 25% is applied.…
Answer this question and get it marked →May–June 2025, Paper 12
Which statement is correct? A The income statement is part of the double entry system and shows a trader's financial performance. B The income statement is part of the double…
Answer this question and get it marked →Ann and Bob are in partnership and share profits in the ratio 3 : 2 respectively. Ann is entitled to a salary of $20 000 per annum. There is no interest on capital or interest on…
Answer this question and get it marked →What are the advantages to shareholders of operating as a limited company? 1 It has a separate legal identity. 2 It makes it easier to prepare financial statements. 3 It makes it…
Answer this question and get it marked →During the year ended 31 March 2025, subscriptions received by a club amounted to $2500, of which $120 related to the next financial year. On 31 March 2025, subscriptions accrued…
Answer this question and get it marked →The bank account kept by a sports club shows that subscriptions totalling $2695 were received during the financial year. This figure includes arrears of subscriptions owing from…
Answer this question and get it marked →A tennis club sells refreshments on match days. At the end of the first accounting period, the receipts and payments account included the following: $ --- --- receipts from sales…
Answer this question and get it marked →A manufacturing business calculated the following amounts for the year ended 30 April 2025. item $ --- --- prime cost 360 000 factory overheads 114 850 work in progress at 30…
Answer this question and get it marked →Which items are included in the calculation of prime cost in a manufacturing account? A direct and indirect costs B direct materials cost and direct labour cost only C direct…
Answer this question and get it marked →A manufacturer's work in progress at the start of the year was valued at $850. At the end of the year it was valued at $10 200. What was the effect of this increase on the cost of…
Answer this question and get it marked →Gustav began a business on 1 January 2023 with $50 000 capital. He provided the following information for the year ended 31 December 2024. $ --- --- capital opening balance 58 000…
Answer this question and get it marked →May–June 2025, Paper 21
H Limited prepares its financial statements to 30 April each year. During the year ended 30 April 2025, the following took place: 1. The company made a profit for the year of $26…
Answer this question and get it marked →Grace owns a factory which makes shoes. She buys handbags from a supplier and sells the shoes and handbags. Grace prepares her financial statements to 31 March each year. At 31…
Answer this question and get it marked →May–June 2025, Paper 22
Farah and Salma are sisters who trade as a partnership. Their partnership agreement provides for the following: - interest on capital of 2% per annum - interest on drawings of 4%…
Answer this question and get it marked →May–June 2024, Paper 21
Zahra and Panya are the shareholders and directors of Q Limited. The company directors of Q Limited have provided the following trial balance. Q Limited — Trial Balance at 31…
Answer this question and get it marked →Stella started in business as a retailer on 1 April 2023. She sells one type of good only. She has not kept a full set of accounting records but has provided the following…
Answer this question and get it marked →May–June 2024, Paper 22
Toyah owns a factory which makes dolls' houses. Her financial year end is 31 January. At 31 January 2024, her ledger accounts included the following balances. $ --- --- Inventory…
Answer this question and get it marked →Tadeen and Yadid are lawyers who have been in partnership for many years. The partners provided the following trial balance at 30 April 2024. Tadeen and Yadid — Trial balance at…
Answer this question and get it marked →October–November 2024, Paper 22
Ben runs a small business but does not maintain a full set of accounting records. He has provided the following information: 1 April 2023 $ 31 March 2024 $ --- --- --- Premises at…
Answer this question and get it marked →Sports T is a club providing sporting facilities to its members. The club hires all sporting equipment. The club also runs a small café selling food and refreshments which members…
Answer this question and get it marked →Y Limited is a public limited company. State one difference between a public limited company and a private limited company.
Answer this question and get it marked →October–November 2023, Paper 22
Sara owns a clothing factory. She sells the clothing to a small number of local shops. She allows 30 days credit. At 30 September 2023, Sara's ledger account balances included the…
Answer this question and get it marked →Lionel started trading on 1 July 2022. He paid $15 000 of his own personal money into the business bank account. He did not keep full accounting records but has supplied the…
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