O-LevelAccountingPreparation of financial statementsOct/Nov 2017Paper 1 Q171 Mark

The owner of a business paid $5000 into the business bank account. A loan for $10000 repayable in 2020 was also obtained and the money used to purchase a motor vehicle. Which changes would take place in the statement of financial position as a result of these transactions?

Q: What topic does this question test?

This question tests Preparation of financial statements in O-Level Accounting (syllabus code 7707). It is worth 1 mark.

Anon-current assets: +5000, owner's equity: +10000, non-current liabilities: +5000

Bnon-current assets: +10000, owner's equity: -5000, non-current liabilities: +10000

Cnon-current assets: +10000, owner's equity: +5000, non-current liabilities: +10000

Dnon-current assets: +15000, owner's equity: +15000, non-current liabilities: -10000

✓ Correct Answer

The correct answer is C: non-current assets: +10000, owner's equity: +5000, non-current liabilities: +10000

📋 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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About This O-Level Accounting Question

Topic

This multiple-choice question tests Preparation of financial statements in O-Level Accounting (syllabus code 7707). It is worth 1 mark.

Source

This question appeared in the Cambridge O-Level Accounting Oct/Nov 2017 examination, Paper 1 Variant 1.

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