A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2021 · Q111 Mark

A trader's income statement recorded sales, $10000, and cost of sales, $7070. The trader had taken goods for his own use during the year, cost $280, selling price $410, but had omitted to record this. What effect did the omission have on the gross margin?

A2.8% overstated

B2.8% understated

C4.1% overstated

D4.1% understated

✓ Correct answer

B: 2.8% understated

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2021 Paper 1 Variant 2, question 11.

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A trader's income statement recorded sales, $10000, and cost of sales, $7070. The trader had taken goods for his own use during the year, cost $280, selling price $410, but had omitted to record this. What effect did the omission have on the gross margin?

✓ Correct answer

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