I N T E R A C T I V E T E X T ADVANCED PAPER 6 DRAFTING FINANCIAL STATEMENTS (INTERNATIONAL) BPP is the official provider of training materials for the ACCA's CAT qualification. This Interactive Text forms part of a suite of learning tools, which also includes CD-ROMs for tuition and computer based assessment, and the innovative, internet-based Learn Online. This text has been specifically written to the current syllabus and Teaching Guide. • Clear language and presentation • Plenty of questions, examples and quizzes to demonstrate and practise techniques • A question and answer bank prepared by BPP Learning Media authors FOR EXAMS IN DECEMBER 2008 AND JUNE 2009 ii First edition 2003 Sixth edition June 2008 ISBN 9870 7517 4832 1 (Previous ISBN 9780 7517 3579 6) British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Published by BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA www.bpp.com/learningmedia Printed in the United Kingdom Your learning materials, published by BPP Learning Media Ltd, are printed on paper sourced from sustainable, managed forests. All our rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media Ltd. We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past examination questions. The suggested solutions in the exam answer bank have been prepared by BPP Learning Media Ltd, unless where otherwise stated. © BPP Learning Media Ltd 2008 Contents iii Contents Page Introduction How to use this Interactive Text v Approach to examining the syllabus vi Analysis of past papers vi Tackling multiple choice questions vii Part A Introduction to financial reporting 1 Introduction to financial statements 3 2 Non-current assets and inventory 15 3 Review of basic financial accounts 47 4 Accounting conventions 71 Part B Preparation of final accounts 5 Partnership accounts 87 6 Incomplete records 117 7 Limited liability companies 151 Part C The regulatory and conceptual framework 8 The regulatory framework 179 9 Conceptual framework 189 Part D Accounting standards 10 Contingencies and events after the reporting period 207 11 Intangibles and taxation 217 Part E Interpretation of accounts 12 Statement of cash flows 235 13 Ratio analysis 255 Part F Simple consolidated accounts 14 Introduction to group accounts 287 15 The consolidated statement of financial position 297 16 The consolidated income statement 327 Exam question bank 341 Exam answer bank 355 List of key terms 375 Index 376 Review form and free prize draw