O-LevelAccountingAccounting procedures7707/12 · Oct/Nov 2022 · Q261 Mark

In a manufacturing account, carriage on raw materials was incorrectly treated as a factory overhead. How did this error affect the prime cost and the cost of production? prime cost cost of production A overstated no effect B overstated overstated C understated no effect D understated understated

Aoverstated, no effect

Boverstated, overstated

Cunderstated, no effect

Dunderstated, understated

✓ Correct answer

C: understated, no effect

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Topic: Accounting procedures, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, Oct/Nov 2022 Paper 1 Variant 2, question 26.

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