Day: February 25, 2024

Which of the following statements concerning preparation of financial statements is true?

Select ONE answer:

1. The balances on income and expense accounts are brought down at the end of the accounting period to be carried forward to the next accounting period
2. The balances on asset and liability accounts are summarised in an additional ledger account known as the statement of financial position ledger account
3. The profit and loss ledger account is a list of all the balances extracted from the business’s accounts
4. A net loss is a credit entry in the profit and loss ledger account

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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