A-LevelAccountingErrors and Suspense AccountsFeb/Mar 2023Paper 1 Q51 Mark
A business has incorrectly recorded a vehicle purchase as a vehicle repair. The business does not charge depreciation on assets in the year of purchase. What is the effect of this error on the financial statements?
Astatement of profit or loss: profit overstated; statement of financial position: assets overstated
Bstatement of profit or loss: profit overstated; statement of financial position: assets understated
Cstatement of profit or loss: profit understated; statement of financial position: assets overstated
Dstatement of profit or loss: profit understated; statement of financial position: assets understated
✓ Correct Answer
The correct answer is D. This question tests the candidate's understanding of errors and suspense accounts within the Accountingsyllabus. The examiner's mark scheme requires...
📋 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...
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