A-LevelAccountingAnalysis and Interpretation of Financial StatementsFeb/Mar 2024Paper 1 Q211 Mark

H Limited’s cost of sales for the recent two years (Year 2 and Year 1) is as follows: Year 2 $ / Year 1 $: average inventory 100 000 / 65 000 credit purchases 910 000 / 760 000 cost of sales 850 000 / 750 000 Which statement regarding the efficiency of inventory turnover is correct?

Q: What topic does this question test?

This question tests Analysis and Interpretation of Financial Statements in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

AYear 2 is better because the average inventory is higher.

BYear 2 is better because the inventory turnover (in days) is higher.

CYear 2 is worse because the cost of sales is higher.

DYear 2 is worse because the inventory turnover (in days) is higher.

✓ Correct Answer

The correct answer is D: Year 2 is worse because the inventory turnover (in days) is higher.

📋 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 A-Level Accounting Question

Topic

This multiple-choice question tests Analysis and Interpretation of Financial Statements in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting Feb/Mar 2024 examination, Paper 1 Variant 2.

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