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2 marksSocial, Ethical, and Reporting Considerations

CAPE Accounting Unit 1 · 2021 · Paper 2 · Question 3(a)(i)

Outline the effects of inflation on financial statements, specifically relating to the following items:

Outline the effects of inflation on financial statements, specifically relating to Closing inventory.

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  1. 3(a)(ii)Outline the effects of inflation on financial statements, specifically relating to Depreciation.[2 marks]
  2. 3(a)(iii)Describe the current cost accounting method which may be used as an alternative to historical cost accounting in areas of high inflation.[3 marks]
  3. 3(b)(i)Define the term 'adjusting events', according to Section 32 of the IFRS for SME (IAS 10) events after the reporting period.[2 marks]
  4. 3(b)(ii)Identify how EACH of the THREE bulleted post-balance sheet events above should be reflected in the financial statements of Tai Ltd for the year ended 31…[5 marks]
  5. 3(c)Using the indirect method, prepare a statement of cash flows for the year ended 31 December 2020, in accordance with Section 7 IFRS for SMEs (IAS 7).[21 marks]

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