O-LevelAccountingAccounting principles and policiesOct/Nov 2025Paper 1 Q181 Mark

Why should prepaid income be shown in the financial statements of a business?

Q: What topic does this question test?

This question tests Accounting principles and policies in O-Level Accounting (syllabus code 7707). It is worth 1 mark.

Aso that credit customers pay the correct amount

Bso that payments to credit suppliers are correctly recorded

Cso that the statement of financial position shows the correct current assets

Dso that the total income is matched against the total costs of the same period

✓ Correct Answer

The correct answer is D: so that the total income is matched against the total costs of the same period

📋 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 Accounting principles and policies in O-Level Accounting (syllabus code 7707). It is worth 1 mark.

Source

This question appeared in the Cambridge O-Level Accounting Oct/Nov 2025 examination, Paper 1 Variant 2.

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