What this practice covers
These questions are drawn from past CIE 9706 Accounting papers and filtered to adjustments to financial statements. You answer, you find out immediately whether you were right, and you get the reasoning for the correct option and for each distractor. Wrong answers go to a mistakes locker so you can come back to exactly those.
Practice is free. You need an account only so your progress and your mistakes are still there next time.
Start practising practice questions →
What examiners see students get wrong here
These are the errors that cost marks on adjustments to financial statements, taken from our own topic notes. Read them before you practise and you will recognise the traps in the questions.
- Charging the full allowance to the income statement instead of the movement in it.
- Calculating the allowance before writing off irrecoverable debts.
- Reversing accruals and prepayments, or putting a prepaid expense in liabilities.
- Applying the lower of cost and net realisable value to the total rather than line by line.
- Valuing inventory at selling price.
- Adjusting only the income statement and leaving the statement of financial position untouched.
- Treating a recovered debt as a reduction in the irrecoverable debts of a customer who still owes money.
Revise it first
If any of the above is unfamiliar, work through the notes before practising: Adjustments to financial statements revision notes.