OxfordAQA A-Level Accounting: Preparation of financial statements of sole traders (9615) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 3.1.6, Preparation of financial statements of sole traders, of the OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards. It is International AS content, listed in the specification among the sections assessed in Paper 1: Introduction to Financial Accounting. All businesses and figures are invented, and amounts are in dollars.

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Questions

1. State the accounting concept applied in each case.

(a) Goods taken by the owner for personal use are recorded as drawings. [1] (b) Inventory is valued at net realisable value because it is lower than cost. [1]

2. Computer equipment costs 7,850. It has a residual value of 650 and a useful life of 4 years. Calculate the annual straight line depreciation charge. [2]

3. Equipment bought for 12,500 is depreciated at 40% reducing balance. Calculate the charge for each of the first two years and the carrying amount at the end of year 2. [3]

4. Corvin Print has a year end of 30 June. At 1 July 2025 rent of 1,450 had been paid in advance. During the year to 30 June 2026 rent paid was 17,600. At 30 June 2026 rent of 1,600 is owing. Prepare the rent payable account for the year, showing the transfer to the income statement and the balance brought down. [5]

5. A trader sublets part of a shop at 900 a month. During the year 12,600 rent was received, which includes rent for the first two months of next year. Commission of 360 earned in the year has not been received.

(a) Calculate the rent receivable for the income statement. [2] (b) State how the 1,800 and the 360 are shown in the statement of financial position. [2]

6. A van was bought on 1 January 2023 for 26,500 and depreciated at 30% reducing balance, with a full year’s charge in the year of purchase and none in the year of disposal. It was sold on 20 August 2025 for 11,400. Calculate the accumulated depreciation at the date of sale and prepare the disposal account. [6]

7. At 31 December 2025 trade receivables are 41,150, before writing off a debt of 1,150. The provision for doubtful debts at 1 January 2025 was 1,520 and is to be 3% of trade receivables. During 2025 a customer paid 470 in full for a debt written off in 2024; no entry has been made.

(a) Give the double entries for the 470 received. [2] (b) Calculate the change in the provision and state how it appears in the income statement. [2] (c) Show trade receivables in the statement of financial position. [2]

8. Saffron Homeware’s draft profit for the year is 28,640. These items have not been dealt with:

• goods sent to a customer on sale or return were recorded as sales at 3,350, priced at cost plus 25%; the customer has not accepted them and they are not in closing inventory
• the owner took goods costing 540 for her own use; no entry was made
• closing inventory includes items costing 1,380 with a net realisable value of 910.

Calculate the corrected profit for the year. [5]

9. The owner of a small business argues that, because nobody can say which customers will fail to pay, no provision for doubtful debts should be made. Explain, with reference to two accounting concepts, why it is recorded. [4]

10. Leena Kaur runs Brightwater Surveys, a service business. Extract from the trial balance at 31 August 2026:

Account	Dr	Cr
Fees		148,300
Salaries	61,750
Office rent	15,600
Insurance	3,240
Motor expenses	6,890
Telephone and internet	2,180
Irrecoverable debts	690
Survey equipment: cost / provision for depreciation	38,000	14,200
Motor vehicle: cost / provision for depreciation	32,000	11,520
Trade receivables	22,500
Provision for doubtful debts		1,060

Notes: fees of 2,400 for a survey finished in August have not been recorded; fees include 1,800 received for a survey to be done in September 2026; salaries owing 1,350; insurance prepaid 720; provision for doubtful debts 4% of the trade receivables shown in the trial balance; depreciation on equipment 20% straight line on cost and on the vehicle 25% reducing balance.

Prepare the income statement for the year ended 31 August 2026. [12]

11. Tomasz Wren trades as Wren Tiles. His profit for the year ended 31 May 2026 is 23,480; this figure already reflects every note below. Balances at 31 May 2026: shop fittings cost 24,000, accumulated depreciation 9,600; van cost 19,500, accumulated depreciation 8,190; inventory 14,260; trade receivables 17,400; trade payables 12,350; bank overdraft 2,140; loan repayable 2031, 25,000; capital at 1 June 2025, 15,490; drawings 22,000.

Notes: inventory excludes goods costing 640 held by a customer on sale or return (the sale has already been removed from revenue and receivables); provision for doubtful debts is 5% of trade receivables; insurance prepaid 380; wages owing 610; rent received in advance 450.

Prepare the statement of financial position at 31 May 2026. [10]

Answers

1. (a) Business entity [1] (b) Prudence [1] Examiner insight: Name the concept only; a definition with no name, or two names, may not earn the mark.

2. (7,850 - 650) / 4 [1] = 1,800 a year [1] Examiner insight: Show the formula with the figures substituted before the answer.

3. Year 1: 40% x 12,500 = 5,000 [1]. Year 2: 40% x 7,500 = 3,000 [1]. Carrying amount 12,500 - 8,000 = 4,500 [1] Examiner insight: Year 2 is on 7,500, not on cost; using 5,000 again is the classic error.

4.

                         Rent payable
1 Jul 2025 Balance b/d   1,450   30 Jun 2026 Income statement  20,650
Bank                    17,600
30 Jun 2026 Balance c/d  1,600
                        20,650                                 20,650
                                 1 Jul 2026 Balance b/d         1,600

Opening balance on the debit side [1]; bank 17,600 [1]; closing 1,600 carried down on the debit side [1]; transfer 20,650 [1]; 1,600 brought down on the credit side [1] Examiner insight: Date and narrate each entry, and make sure the brought-down balance is on the opposite side to the carried-down one.

5. (a) 12,600 / 900 = 14 months, so two months (1,800) are in advance [1]; income 12,600 - 1,800 = 10,800 [1] (b) 1,800: income received in advance, an other payable under current liabilities [1]; 360: income due, an other receivable under current assets [1] Examiner insight: Name both the item and the subheading; “current liability” alone is weaker than “other payable, current liabilities”.

6. 2023: 30% x 26,500 = 7,950 [1]; 2024: 30% x 18,550 = 5,565 [1]; accumulated 13,515.

                  Disposal of van
Van (cost)     26,500    Provision for depreciation  13,515
                         Bank                        11,400
                         Income statement (loss)      1,585
               26,500                                26,500

Cost debited [1]; depreciation credited [1]; proceeds credited [1]; loss 1,585 to the income statement [1] Examiner insight: No charge for 2025 here because the policy says none in the year of disposal; read the policy before calculating.

7. (a) Debit the customer, credit irrecoverable debts recovered 470 [1]; debit bank, credit the customer 470 [1] (b) Receivables 41,150 - 1,150 = 40,000; 3% = 1,200 [1]; decrease 320, shown as income [1] (c) Trade receivables 40,000 less provision 1,200 [1] = 38,800 [1] Examiner insight: Reinstating the debt first leaves a record that the customer paid, which is why it is not just debit bank, credit income.

8. Revenue overstated: -3,350 [1]; goods back in inventory at cost, 3,350 / 1.25 = 2,680: +2,680 [1]; purchases cut by the owner’s goods: +540 [1]; NRV write-down 1,380 - 910 = 470: -470 [1]; corrected profit 28,040 [1] Examiner insight: Show each adjustment with a plus or minus sign so every step can be followed.

9. Prudence: assets should not be overstated [1], so receivables are shown at the amount expected to be collected [1]. Accruals: the expected loss belongs to the period in which the credit sales were made [1], so it is charged against that period’s revenue rather than when the debt is finally written off [1] Examiner insight: Each concept needs a name and an application to doubtful debts; a definition alone is not enough.

10.

Brightwater Surveys
Income statement for the year ended 31 August 2026
Fees (148,300 + 2,400 - 1,800)                 148,900
Decrease in provision for doubtful debts           160
                                               149,060
Less expenses
  Salaries (61,750 + 1,350)          63,100
  Office rent                        15,600
  Insurance (3,240 - 720)             2,520
  Motor expenses                      6,890
  Telephone and internet              2,180
  Irrecoverable debts                   690
  Depreciation: equipment             7,600
  Depreciation: vehicle               5,120     103,700
Profit for the year                              45,360

Correct heading [1]; fees +2,400 [1] and -1,800 [1]; provision 4% x 22,500 = 900, decrease 160 as income [1]; salaries 63,100 [1]; insurance 2,520 [1]; unadjusted expenses brought in [1]; equipment 20% x 38,000 = 7,600 [1]; vehicle 25% x 20,480 = 5,120 [1]; total expenses 103,700 [1]; profit 45,360 [1]; no cost of sales or gross profit for a service business [1] Examiner insight: Put adjusted figures in brackets beside each item so the working is visible in the statement itself.

11.

Wren Tiles: Statement of financial position at 31 May 2026
Non-current assets      Cost   Acc. dep.  Carrying
  Shop fittings       24,000     9,600     14,400
  Van                 19,500     8,190     11,310
                                           25,710
Current assets
  Inventory (14,260 + 640)       14,900
  Trade receivables   17,400
  Less provision         870     16,530
  Other receivables                 380    31,810
Total assets                               57,520
Equity
  Capital                                  15,490
  Add profit for the year                  23,480
  Less drawings                            22,000
                                           16,970
Non-current liabilities
  Loan                                     25,000
Current liabilities
  Trade payables                 12,350
  Other payables (610 + 450)      1,060
  Bank overdraft                  2,140    15,550
Total equity and liabilities               57,520

Non-current assets with cost, depreciation and carrying amount [1]; total 25,710 [1]; inventory 14,900 [1]; receivables net 16,530 [1]; other receivables and current assets 31,810 [1]; other payables 1,060 [1]; overdraft in current liabilities, total 15,550 [1]; loan as non-current liability [1]; closing capital 16,970 [1]; both totals 57,520 [1] Examiner insight: Use the specification’s five subheadings exactly; a loan placed under current liabilities misstates both sections.

Where marks are usually lost

• Deducting an opening prepayment instead of adding it to the expense charge.
• Using cost for every year of reducing balance depreciation.
• Calculating the provision before writing off year-end irrecoverable debts.
• Adding goods on sale or return to inventory at selling price.
• Giving a service business a cost of sales or gross profit line.

Next steps

• Revision notes
• Study guide
• Exam preparation guide
• Course hub
• Printable checklist
• All free 10-minute diagnostics
• Book a free trial class

Official syllabus

OxfordAQA International AS and A-level Accounting (9615) specification, Version 1.2, for International AS exams May/June 2025 onwards and International A-level exams May/June 2026 onwards, section 3.1.6 Preparation of financial statements of sole traders. Published by OxfordAQA.