O-LevelAccountingPreparation of financial statementsOct/Nov 2019Paper 1 Q151 Mark
After the preparation of Abdul's draft financial statements two errors were discovered. The purchase of a machine on credit, $5000, was omitted from the accounts. The purchase of a motor vehicle, $15000, was entered in error in the motor vehicle repair account. What effect will correcting these errors have on the non-current assets and the working capital? non-current assets $ working capital $
Aincrease 15000
decrease 5000
Bincrease 15000
no effect
Cincrease 20000
decrease 5000
Dincrease 20000
no effect
✓ 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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