A-LevelAccountingPreparation of financial statements9706/12 · Oct/Nov 2025 · Q41 Mark

An item of capital expenditure has been treated as revenue expenditure. What is the effect on the non-current assets and on the loss for the year? non-current assets loss for the year A overstated overstated B overstated understated C understated overstated D understated understated

Aoverstated, overstated

Boverstated, understated

Cunderstated, overstated

Dunderstated, understated

✓ Correct answer

C: understated, overstated

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Oct/Nov 2025 Paper 1 Variant 2, question 4.

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An item of capital expenditure has been treated as revenue expenditure. What is the effect on the non-current assets and on the loss for the year? non-current assets loss for the year A overstated overstated B overstated understated C understated overstated D understated understated

✓ Correct answer

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