O-LevelAccountingPreparation of financial statementsOct/Nov 2019Paper 1 Q131 Mark

Sales returns were incorrectly recorded as purchases returns in an income statement. What was the effect of this error?

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.

ACapital employed was understated.

BCost of sales was overstated.

CGross profit was understated.

DProfit for the year was overstated.

✓ Correct Answer

The correct answer is D: Profit for the year was overstated.

📋 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 2019 examination, Paper 1 Variant 1.

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