A-LevelAccountingAnalysis and Interpretation of Financial Statements / RatiosOct/Nov 2018Paper 1 Q181 Mark
The financial data relates to two businesses. trade receivable turnover (days) X: 90 Y: 40 trade payable turnover (days) X: 50 Y: 70 liquid (acid test) ratio X: 3:1 Y: 1:1 current ratio X: 4.5:1 Y: 6.2:1 Which statement about the comparison of the two businesses' performance is correct?
AX has better credit control system.
BX has higher profitability.
CY has better credit control system.
DY has higher profitability.
✓ Correct Answer
The correct answer is C: Y has better credit control system.
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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