IGCSE Accounting (9–1) 0985 · Topic 5

Preparation of financial statements: past paper questions

227 real questionsasked in 10 of the last 10 exam series2020–2026usually: Calculate, Justify, State, Name, Explain

Real questions on preparation of financial statements

The newest 20 of 64 written questions, plus 163 multiple-choice. Open one to see it on the real paper.

0985/21 · May/June 2026 · Q2a[3]
Calculate the accumulated fund of the club at 31 March 2025.
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0985/21 · May/June 2026 · Q2b[6]
Prepare the subscriptions account for the year ended 31 March 2026. Balance the account and bring down the balances at 1 April 2026. Hi Notes Music Club Subscriptions account details $ date
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0985/21 · May/June 2026 · Q2c[4]
Prepare the income statement for the coffee shop for the year ended 31 March 2026. Hi Notes Music Club Coffee shop income statement for the year ended 31 March 2026
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0985/21 · May/June 2026 · Q2d[5]
Prepare the income and expenditure account for the club for the year ended 31 March 2026. Hi Notes Music Club Income and expenditure account for the year ended 31 March 2026
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0985/21 · May/June 2026 · Q2e[2]
Calculate the accumulated fund of the club at 31 March 2026.
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0985/21 · May/June 2026 · Q3d[4]
Prepare an extract from the statement of financial position showing the capital section (closing balances only) at 31 March 2026. Yasmin and Zafran Statement of financial position (extract) at 31 March 2026
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0985/22 · May/June 2026 · Q2a[10]
Prepare Bennu’s manufacturing account for the year ended 30 April 2026. Bennu Manufacturing account for the year ended 30 April 2026 $ 1 0)
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0985/22 · May/June 2026 · Q2b[5]
Prepare Bennu’s income statement (trading section) for the year ended 30 April 2026. Bennu Income statement (trading section) for the year ended 30 April 2026
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0985/22 · May/June 2026 · Q4b[8]
Prepare the statement of financial position for Jay KL Limited at 28 February 2026. Jay KL Limited Statement of financial position at 28 February 2026
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0985/22 · May/June 2026 · Q4d[5]
Advise the directors whether or not they should issue ordinary shares in order to fund new shop fixtures. Justify your answer by providing points for and against issuing ordinary shares in order to fund new shop fixtures.
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0985/22 · October/November 2025 · Q5a[13]
Prepare the manufacturing account for GH Company for the year ended 31 March 2025. GH Company Manufacturing Account for the year ended 31 March 2025 $ $ REQUIRED
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0985/22 · October/November 2025 · Q5b[7]
GH Company Income Statement (Trading section) for the year ended 31 March 2025 $ $ (b) Prepare the trading section of the income statement for GH Company for the year ended 31 March 2025.
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0985/21 · May/June 2025 · Q4a[4]
Prepare the statement of changes in equity for H Limited for the year ended 30 April 2025. H Limited Statement of Changes in Equity for the year ended 30 April 2025 Ordinary share capital $ General reserve Retained earnings Total $ $ $ On 1 May 2024 120 000 20 000 33 635 173 635 On 30 April 2025 Details Fixtures and eq...
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0985/21 · May/June 2025 · Q4b[7]
Prepare the statement of financial position for H Limited at 30 April 2025. H Limited Statement of Financial Position at 30 April 2025 $ $
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0985/21 · May/June 2025 · Q5a[10]
Prepare Grace’s manufacturing account for the year ended 31 March 2025. Grace Manufacturing Account for the year ended 31 March 2025 $ $ Grace buys handbags for $14 each and sells them for $27 each. Grace counted her inventory of handbags on 31 March 2025 and found that: • • • She had a total of 255 handbags. 15 handba...
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0985/22 · May/June 2025 · Q1b[3]
Calculate the amount for the bank balance which Kadima would show in his statement of financial position at 31 March 2025. Kadima is considering stopping using cash and cheques in his business. All payments would be made directly from the bank account and all customers would be required to pay by bank transfer. He woul...
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0985/22 · May/June 2025 · Q1c[5]
Advise Kadima whether or not he should make the above changes. Justify your answer by providing points for and against making these changes.
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0985/22 · May/June 2025 · Q2a[6]
Prepare the appropriation account for Farah and Salma for the year ended 28 February 2025. Farah and Salma Appropriation Account for the year ended 28 February 2025 $ $
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0985/22 · May/June 2025 · Q2b[7]
Prepare Farah’s current account for the year ended 28 February 2025. Balance the account and bring down the balance at 1 March 2025. Farah Current account Date Details $ Date Details $ Farah’s partner, Salma, wanted to take further drawings. REQUIRED
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0985/22 · May/June 2025 · Q2c[2]
State two reasons why Salma should not take more drawings. Farah and Salma would like to expand the business. They have decided to convert the business to a limited company. They are considering selling 30% of the ordinary share capital of the new company to each of their two brothers. The brothers would become directo...
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What examiners said

A signif icant number of candidates arrived at a debit balance brought down in the customer account from 1(c) and linked it correctly to the current assets section in the statement of f inancial position. Weaker answers given were ‘trade receivables’ or ‘expenses’. If a credit balance brought down was arrived at in 1(c) then the answer of current liabilities was accepted, but this indicated a lack...
— Examiner report, October/November 2024, 0985/22 Q1(d) (Cambridge)

Once a profit figure is derived, the various inf ormation that will make-up the trading and income statements can be calculated. As the question requested a calculation f or the credit purchases candidates could use a logic calculation or they could use a control account approach to arrive at an answer. Too often, opening and closing balances were mixed up f or trade receivables and payables and t...
— Examiner report, October/November 2024, 0985/22 Q2(c)(i) (Cambridge)

Most candidates were able to attempt to produce an income and expenditure account for the club. Similarly, as in Question 2, many answers were not linked to the main sources of income f or the club prepared previously in parts (a) and (b). Receipts of $162 000 and $27 000 were regularly Cambridge International General Certif icate of Secondary Education (9–1) Principal Examiner Report f or Teache...
— Examiner report, October/November 2024, 0985/22 Q3(c) (Cambridge)

Practise this topic

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In the syllabus

1 0452.5.1.01 — explain the advantages and disadvantages of operating as a sole trader

explain the advantages and disadvantages of operating as a sole trader
explain the importance of preparing income statements and statements of financial position
explain the difference between a trading business and a service business
prepare income statements for trading businesses and for service businesses
understand that statements of financial position record assets and liabilities on a specified date
recognise and define the content of a statement of financial position: non-current assets, intangible
understand the inter-relationship of items in a statement of financial position
prepare statements of financial position for trading businesses and service businesses
make adjustments for provision for depreciation using the straight line, reducing balance and revaluation
make adjustments for accrued and prepaid expenses and accrued and prepaid income
make adjustments for irrecoverable debts and provisions for doubtful debts
make adjustments for goods taken by the owner for own use.

2 0452.5.1.02 — explain the importance of preparing income statements and statements of financial position

explain the importance of preparing income statements and statements of financial position

3 0452.5.1.03 — explain the difference between a trading business and a service business

explain the difference between a trading business and a service business

4 0452.5.1.04 — prepare income statements for trading businesses and for service businesses

prepare income statements for trading businesses and for service businesses

5 0452.5.1.05 — understand that statements of financial position record assets and liabilities on a specified date

understand that statements of financial position record assets and liabilities on a specified date

6 0452.5.1.06 — recognise and define the content of a statement of financial position: non-current assets, intangible

recognise and define the content of a statement of financial position: non-current assets, intangible

7 0452.5.1.07 — understand the inter-relationship of items in a statement of financial position

understand the inter-relationship of items in a statement of financial position

8 0452.5.1.08 — prepare statements of financial position for trading businesses and service businesses

prepare statements of financial position for trading businesses and service businesses

9 0452.5.1.09 — make adjustments for provision for depreciation using the straight line, reducing balance and revaluation

make adjustments for provision for depreciation using the straight line, reducing balance and revaluation

10 0452.5.1.10 — make adjustments for accrued and prepaid expenses and accrued and prepaid income

make adjustments for accrued and prepaid expenses and accrued and prepaid income

11 0452.5.1.11 — make adjustments for irrecoverable debts and provisions for doubtful debts

make adjustments for irrecoverable debts and provisions for doubtful debts

12 0452.5.1.12 — make adjustments for goods taken by the owner for own use.

make adjustments for goods taken by the owner for own use.

13 0452.5.2.01 — explain the advantages and disadvantages of forming a partnership

explain the advantages and disadvantages of forming a partnership
outline the importance and contents of a partnership agreement
explain the purpose of an appropriation account
prepare income statements, appropriation accounts and statements of financial position
record interest on partners’ loans, interest on capital, interest on drawings, partners’ salaries and the
make adjustments to financial statements as detailed in 5.1 (sole traders)
explain the uses of and differences between capital and current accounts
draw up partners’ capital and current accounts in ledger account form and as part of a statement of

14 0452.5.2.02 — outline the importance and contents of a partnership agreement

outline the importance and contents of a partnership agreement

15 0452.5.2.03 — explain the purpose of an appropriation account

explain the purpose of an appropriation account

16 0452.5.2.04 — prepare income statements, appropriation accounts and statements of financial position

prepare income statements, appropriation accounts and statements of financial position

17 0452.5.2.05 — record interest on partners’ loans, interest on capital, interest on drawings, partners’ salaries and the

record interest on partners’ loans, interest on capital, interest on drawings, partners’ salaries and the

18 0452.5.2.06 — make adjustments to financial statements as detailed in 5.1 (sole traders)

make adjustments to financial statements as detailed in 5.1 (sole traders)

19 0452.5.2.07 — explain the uses of and differences between capital and current accounts

explain the uses of and differences between capital and current accounts

20 0452.5.2.08 — draw up partners’ capital and current accounts in ledger account form and as part of a statement of

draw up partners’ capital and current accounts in ledger account form and as part of a statement of

21 0452.5.3.01 — explain the advantages and disadvantages of operating as a limited company

explain the advantages and disadvantages of operating as a limited company
understand the meaning of the term limited liability
understand the meaning of the term equity
understand the capital structure of a limited company comprising preference share capital, ordinary
understand and distinguish between issued, called-up and paid-up share capital
understand and distinguish between share capital (preference shares and ordinary shares) and loan
prepare income statements, statements of changes in equity and statements of financial position
make adjustments to financial statements as detailed in 5.1 (sole traders).

22 0452.5.3.02 — understand the meaning of the term limited liability

understand the meaning of the term limited liability

23 0452.5.3.03 — understand the meaning of the term equity

understand the meaning of the term equity

24 0452.5.3.04 — understand the capital structure of a limited company comprising preference share capital, ordinary

understand the capital structure of a limited company comprising preference share capital, ordinary

25 0452.5.3.05 — understand and distinguish between issued, called-up and paid-up share capital

understand and distinguish between issued, called-up and paid-up share capital

26 0452.5.3.06 — understand and distinguish between share capital (preference shares and ordinary shares) and loan

understand and distinguish between share capital (preference shares and ordinary shares) and loan

27 0452.5.3.07 — prepare income statements, statements of changes in equity and statements of financial position

prepare income statements, statements of changes in equity and statements of financial position

28 0452.5.3.08 — make adjustments to financial statements as detailed in 5.1 (sole traders).

make adjustments to financial statements as detailed in 5.1 (sole traders).

29 0452.5.4.01 — distinguish between receipts and payments accounts and income and expenditure accounts

distinguish between receipts and payments accounts and income and expenditure accounts
prepare receipts and payments accounts
prepare accounts for revenue-generating activities, e.g. refreshments, subscriptions
prepare income and expenditure accounts and statements of financial position
make adjustments to financial statements as detailed in 5.1 (sole traders)
define and calculate the accumulated fund.

30 0452.5.4.02 — prepare receipts and payments accounts

prepare receipts and payments accounts

31 0452.5.4.03 — prepare accounts for revenue-generating activities, e.g. refreshments, subscriptions

prepare accounts for revenue-generating activities, e.g. refreshments, subscriptions

32 0452.5.4.04 — prepare income and expenditure accounts and statements of financial position

prepare income and expenditure accounts and statements of financial position

33 0452.5.4.05 — make adjustments to financial statements as detailed in 5.1 (sole traders)

make adjustments to financial statements as detailed in 5.1 (sole traders)

34 0452.5.4.06 — define and calculate the accumulated fund.

define and calculate the accumulated fund.

35 0452.5.5.01 — distinguish between direct and indirect costs

distinguish between direct and indirect costs
understand direct material, direct labour, prime cost and factory overheads
understand and make adjustments for work in progress
calculate factory cost of production
prepare manufacturing accounts, income statements and statements of financial position
make adjustments to financial statements as detailed in 5.1 (sole traders).

36 0452.5.5.02 — understand direct material, direct labour, prime cost and factory overheads

understand direct material, direct labour, prime cost and factory overheads

37 0452.5.5.03 — understand and make adjustments for work in progress

understand and make adjustments for work in progress

38 0452.5.5.04 — calculate factory cost of production

calculate factory cost of production

39 0452.5.5.05 — prepare manufacturing accounts, income statements and statements of financial position

prepare manufacturing accounts, income statements and statements of financial position

40 0452.5.5.06 — make adjustments to financial statements as detailed in 5.1 (sole traders).

make adjustments to financial statements as detailed in 5.1 (sole traders).

41 0452.5.6.01 — explain the disadvantages of not maintaining a full set of accounting records

explain the disadvantages of not maintaining a full set of accounting records
prepare opening and closing statements of affairs
calculate profit or loss for the year from changes in capital over time
calculate sales, purchases, gross profit, trade receivables and trade payables and other figures from
prepare income statements and statements of financial position from incomplete records
make adjustments to financial statements as detailed in 5.1 (sole traders)
apply the techniques of mark-up, margin and inventory turnover to arrive at missing figures.

42 0452.5.6.02 — prepare opening and closing statements of affairs

prepare opening and closing statements of affairs

43 0452.5.6.03 — calculate profit or loss for the year from changes in capital over time

calculate profit or loss for the year from changes in capital over time

44 0452.5.6.04 — calculate sales, purchases, gross profit, trade receivables and trade payables and other figures from

calculate sales, purchases, gross profit, trade receivables and trade payables and other figures from

45 0452.5.6.05 — prepare income statements and statements of financial position from incomplete records

prepare income statements and statements of financial position from incomplete records

46 0452.5.6.06 — make adjustments to financial statements as detailed in 5.1 (sole traders)

make adjustments to financial statements as detailed in 5.1 (sole traders)

47 0452.5.6.07 — apply the techniques of mark-up, margin and inventory turnover to arrive at missing figures.

apply the techniques of mark-up, margin and inventory turnover to arrive at missing figures.

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