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?
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. This question tests the candidate's understanding of preparation of financial statements within the Accountingsyllabus. The examiner's mark scheme requires...
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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...
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