O-LevelAccountingVerification of accounting recordsOct/Nov 2024Paper 1 Q161 Mark

On 1 January 2023 Kate paid $400 for a two-year maintenance contract on her machinery starting on that date. In error this amount was debited to the machinery account. Kate depreciates her machinery at the rate of 20% per annum. What effect did the error have on Kate's profit for the year ended 31 December 2023?

Q: What is the correct answer to this O-Level Accounting question?

The correct answer is A: overstated by $80.

Q: What topic does this question test?

This question tests Verification of accounting records in O-Level Accounting (syllabus code 7707). It is worth 1 mark.

Aoverstated by $80

Boverstated by $120

Cunderstated by $80

Dunderstated by $120

✓ Correct Answer

The correct answer is A: overstated by $80

📋 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 Verification of accounting records in O-Level Accounting (syllabus code 7707). It is worth 1 mark.

Source

This question appeared in the Cambridge O-Level Accounting Oct/Nov 2024 examination, Paper 1 Variant 3.

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