Section A: Theory of Financial Accounting
Question 3
(a) State three effects of drawings on the business of a sole proprietor.
(b) Explain how the following items are treated in the balance sheet:
(i) accrued expenses;
(ii) prepaid expenses;
(iii) accrued income.
Observation
Majority of the candidates attempted this question and the performance was impressive with many of them gaining scores above average.
Some of the expected responses were: