A-LevelAccountingAnalysis and Interpretation of Financial StatementsMay/June 2010Paper 1 Q201 Mark

A company buys and re-sells goods. It has a higher gross profit margin than its rivals. Which reason could explain this?

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.

ARival companies pay less for goods than the company.

BRival companies spend less on advertising than the company.

CThe Company charges a higher selling price than its rivals.

DThe Company charges a lower price than its rivals.

✓ Correct Answer

The correct answer is C: The Company charges a higher selling price than its rivals.

📋 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 May/June 2010 examination, Paper 1 Variant 2.

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